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Nova Climbs....: Israel Overnight

Nova Measuring Instruments Ltd. (NVMI), the Israeli maker of equipment for semiconductor manufacturing, rebounded in New York after the chief executive officer said he’s confident its largest customer won’t pare back orders.

Nova rose 1.8 percent to $9.22 on July 19, paring a 2.2 percent loss from the day before sparked by concern that revenue would slump after Taiwan Semiconductor Manufacturing Co. (TSM) forecast third-quarter sales that trailed estimates. The stock ended the week at a 1.3 percent discount to shares in Tel Aviv. The Bloomberg Israel-US Equity Index of the most traded Israeli companies in New York rose 0.4 percent, extending its gain last week to 2.6 percent, the most since March 8.

Chief Executive Officer Gabi Seligsohn said in an interview that while TSMC may delay orders into the fourth quarter or early next year, demand for the Ness-Ziona, Israel-based company’s products will remain strong as semiconductor plants churn out more of the 20-nanometer chips for use in smartphones from Apple Inc. and Samsung Electronics Co. TSMC said July 18 that slumping demand for computers is crimping growth.

“We know that there are multiple orders coming our way, but the timing is the issue,” Seligsohn said by phone. “They are focused on the 20-nanometer ramp up. That is something that is very strategic for them.”

One nanometer, equal to one billionth of a meter, measures the size of connections within a chip. A smaller number implies more advanced technology, allowing semiconductors to be smaller and more powerful.

Nova’s sales will increase 12 percent this year, after falling 6.5 percent in 2012, according to the average estimate of two analysts surveyed by Bloomberg.

Demand Outlook

“We expect to see a pickup in the fourth quarter of this year,” Edwin Mok, an analyst at Needham & Co. in San Francisco, said in a telephone interview July 19. Mok has a buy rating for the stock. “Next year, for the whole year, we expect the level of spending from TSMC, and Nova’s business with this customer, to be roughly the same as this year.”

The Bloomberg Israel-US Equity Index rallied for a fourth week to 96.22, extending its advance this year to 11 percent. Israel’s benchmark TA-25 Index (TA-25) slipped 0.1 percent to 1,226.05 at 10:31 a.m. in Tel Aviv.

Gilat Satellite Networks Ltd. (GILT), an Israeli defense company, posted the biggest decline on the Bloomberg-Israel US gauge last week. The shares tumbled 8.6 percent to $5.20 after the company cut its 2013 sales estimate about 4.2 percent on July 18. Shares in Israel rose this morning, gaining 0.6 percent to 18.51 shekels, or $5.18.

Allot Communications Ltd. (ALLT) rallied 11 percent last week to $15.01 in New York. Shares in Tel Aviv today narrowed the premium, declining 2.5 percent to 53.5 shekels, or $14.98.

Israeli and Palestinian officials reached an agreement to resume direct peace talks that had stopped in 2010, U.S. Secretary of State John Kerry said July 19. Both parties agreed to meet in Washington within about a week. The shekel added 0.2 percent to 3.5719 per U.S. dollar, extending the weekly advance to 0.8 percent.

To contact the reporter on this story: Jessica Summers in New York at jsummers17@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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