Israel Shares Rise as Gas-Field Reserves Are Increased

Israeli stocks jumped the most since December after energy companies raised estimates for reserves at the Leviathan gas field by 15 percent, even as the conflict between Israel and militants in the Gaza Strip intensified.

The TA-25 Index (TA-25) increased 1.3 percent, the most in more than seven months, to 1,389.98 at the close in Tel Aviv. Delek Group Ltd., which owns stakes in the Leviathan field via its Delek Drilling LP and Avner Oil Exploration LLP units, advanced 1.7 percent. Kuwait’s SE Price Index (KWSEIDX) added 1.5 percent, the most since October. Dubai’s DFM General Index climbed 0.1 percent.

Shares rallied as investors speculated fighting between Israel and militants in the Hamas-controlled Gaza Strip will have limited impact on the economy. Leviathan’s offshore resources are as much as 21.94 trillion cubic feet, up from 19 TCF, Delek Drilling and Avner said in a stock exchange filing and e-mailed statement today, citing petroleum consultants Netherland, Sewell & Associates, Inc. Israel expects the Leviathan field, discovered in 2010, to meet its gas needs for 25 years, while bolstering export earnings.

“The gas drillers are helping to lift the market after Leviathan reserves were updated,” Saar Golan, a trader at Meitav DS Investment House Ltd. in Bnei Brak, Israel, said by phone. “Since Wednesday, there hasn’t been much of a change in the geopolitical situation, and the market has already priced in the current conflict, but not yet pricing in a ground operation. Based on past operations, the market estimates the economic damage to be limited.”

Intensified Attacks

Shares of Delek Group rose to 1,380 shekels. Ratio Oil Exploration 1992 LP (RATIL), a partner in the Leviathan field, jumped 3.1 percent to 0.50 shekel. Delek Drilling increased 1.8 percent to 19.50 shekels. Avner climbed 1.3 percent to 3.508 shekels. About 2.6 billion shekels ($757 million) of shares traded, below the 12-month daily average of 5 billion shekels, according to data compiled by Bloomberg.

Thousands of Palestinians fled to United Nations facilities in the Gaza Strip seeking sanctuary after Israel warned them to leave their homes before stepped-up strikes against rocket squads. As trucks carrying tanks traveled south to the Gaza border, Israel edged closer to its first ground assault on the territory since 2009. After five days of Israeli bombing, the Palestinian death toll was at least 165.

The yield on Israel’s benchmark bond due March 2024 fell one basis point to 2.85 percent.

“The Israeli market continues to show maturity,” Rafi Gozlan, chief economist at Tel Aviv-based I.B.I. Israel Brokerage and Investments Ltd., said in an e-mailed note today. “Although there is always a chance that this time things may be different, and results may be worse, the weight of that happening remains small at this point.”

Earnings

Kuwait’s benchmark index advanced to 7,178.75 at the close in Kuwait City. The Bahrain Bourse All Share Index added 1.6 percent to 1,463.78. Saudi Arabia’s Tadawul All Share Index rose 0.1 percent to 9,812.50.

Dubai’s DFM General Index closed at 4,579.76 after rising as much as 1.1 percent earlier on investor speculation property companies will post stronger second-quarter earnings. Arabtec Holding Co. (ARTC), the United Arab Emirates’ biggest publicly traded builder, climbed 1 percent to 4.24 dirhams, the highest since June 19. Arabtec Chairman Khadem Al Qubaisi said July 2 the company’s earnings will be “positive.”

Kurdistan Case

Dana Gas PJSC, an United Arab Emirates fuel producer, said the London Court of International Arbitration ruled that the Kurdistan regional government of Iraq should make regular payments while its case against that administration is ongoing. Its stocks, the second-biggest gainers on Abu Dhabi’s ADX General Index, advanced 4.3 percent to 73 fils. Abu Dhabi’s gauge fell 0.1 percent to 4,841.07.

Egypt’s benchmark EGX30 Index dropped 0.7 percent, the biggest decline since June 25, to 8,401.16. The value of shares traded slumped to 311 million Egyptian pounds, less than half the one-year daily average of 643 million pounds. Trading typically slows during the holy month of Ramadan, when Muslims fast from dawn till dusk for about 30 days.

To contact the reporters on this story: Sarmad Khan in Dubai at skhan170@bloomberg.net; Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net James Doran, Dana El Baltaji

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