TEL AVIV (MarketWatch) -- Israeli stocks were lower on Monday, led by weakness in Israel Chemicals and its parent, offset by strength in the banks and telecom provider Bezeq .
The Tel Aviv Stock Exchange's benchmark TA-25 Index closed lower by 0.58% to 967.90, while the TA-100 Index (1884407) lost 0.57% to finish at 904.26.
The Tel-Tech 15 Index fell 1.06% to 216.48. The Real Estate 15 Index eased 1.57% to 275.61.
And the Finance 15 Index, which reflects the banks and insurers, added 0.30% to 1004.75.
The most-active issue was Israel Chemicals, the producer of fertilizer and chemicals, including potash, derived from the Dead Sea, down 3.7%.
Late Friday, Potash Corp. of Saskatchewan POT, +0.35% issued a profit warning amid stagnant demand for fertilizer and limited restocking of inventories by distributors. Rival Mosaic Co. MOS, +0.63% shares also had declined in after-hours trading on Friday.
Leader Capital Markets said in a note that the "negative surprise is very limited" since investors are well aware of weak conditions in the global potash market. Potash Corp. "still predicts a significant 2010 rebound, required to restore eliminated potash inventory and support global crop yields," Leader said.
Israel Chemicals' holding-company parent, Israel Corp., dropped 4.6%. Agrichemicals specialist Makhteshim-Agan shares lost 1.6%.
Bank Leumi shares nudged up 0.1%. Israel's supervisor of banks was reported by the Israeli daily Ma'ariv as having agreed to enable the government to sell its more than 11% stake in the bank via the stock exchange instead of to an investor.
Leader said the decision means that for the first time, Bank Leumi won't have a specific controlling shareholder. "The final decision [is] to be made by the finance minister, and we believe [the shares won't be sold] in the market for a couple of months," the brokerage said.
Among the other banks, Hapoalim BKHYY, -1.35% advanced 1.3%, Discount rose 0.7% and Mizrahi Tefahot UMZRF added 1.9%.
Insurers include Clal, up 1.6%, Harel, down 1.8%, Migdal MIGDF off 0.7%, and Phoenix, down 3.6%.
Within real estate, Africa-Israel AFIVY shares tacked on 1.5%.
Calcalist, the business section of the Israeli daily Yediot Achronot reported that representatives of the developer have proposed that bondholders convert 4.5 billion shekels of their debt into 2 billion shekels of shares in Africa-Israel's subsidiaries.
Another 1.5 billion shekels of debt would be converted to capital notes and the company would pay 500 million shekels in cash, Calcalist reported. The bondholders are willing to give up 1.5 billion shekels of their debt in a settlement, the paper reported.
Among other companies in the sector, Nitsba fell 5.7% and Melisron, Kardan (KARD) and Bayside Land all fell more than 3%.
Teva Pharmaceutical shares TEVA, +0.98% were unchanged. Peer drugmaker Perrigo's PRGO, -2.09% shares fell 1.9%.
Within telecommunications, Bezeq shares climbed 1.8%, Cellcom CEL, +2.36% was off 0.6% and Partner PTNR, +0.87% move up 1%.
Within technology, Mellanox, MLNX, +0.05% a provider of technology that enables transmission of data among servers, communications infrastructure and storage systems, declined 1.7%; while Ceragon, CRNT, +0.27% developer of solutions for wireless- and fixed-line network operators and enterprises, fell 4.1%. A big winner: banking-technology provider Fundtech, FNDT up 6.7%.
El Al Israel Airlines shares, listed on the TA-100, rose 1.9%.
The Israeli daily Globes reported that the Antitrust Authority's director general, Ronit Kan, ruled that a number of the carrier's code-sharing agreements create restraint of trade and reduce competition. Code-sharing accords enable multiple airlines to share capacity on flights.
Kan declined to accept El Al's code-sharing agreements with Air India, Austrian Airlines, Tandem Aero of Moldova, Lot of Poland, Balkan Bulgarian Airlines and Aerosvit of Ukraine, Globes reported.
"The measure is good news for consumers," and should increase competition in the market, the paper quoted Kan as saying.
In a statement, El Al said that it saw "room to approve all the code-sharing agreements" and that it was disappointed by the Antitrust Authority's decision not to approve some of them.
The stand [of the Antitrust Authority] does not serve the interests of competition and is not compatible with the stand of world competition authorities and the trend of engagement in code-sharing agreements" worldwide, El Al said.
On the macroeconomic front, UBS economist Reinhard Cluse said that Israel's economy has been resilient throughout the global crisis. He increased his forecast for economic growth for 2009, to 0.3% from negative 0.8%, and for 2010, to 3% from 2.7%.
"This is above consensus but still below Israel's medium-term growth potential, which we estimate at around 4%," the analyst wrote in a report.
Cluse cited the country's "sizable current-account surplus," which is about 3% of gross domestic product. He also sees a stronger shekel, 3.8 to the U.S. dollar at the end of 2009 and 3.5 at the end of 2010.
The current-account calculates the value of goods; services; income from salaries, dividends, investments and other sources; and transfers, like donations, aid and grants, that flow in and out of the country. It's a barometer of whether a country needs to borrow abroad. Israel has run annual current-account surpluses for 2003 through 2008.
"The high public-sector debt" remains "a major blemish" in Israel's macroeconomic picture, the economist wrote. But "conservative fiscal policy" has helped cut debt to 78% of GDP in 2008 from 100% in 2003, Cluse wrote.
"This has given the government room to boost deficit spending substantially this year without spreading panic in the bond market," he wrote.