Israeli companies traded in New York posted the biggest weekly decline since May after a sluggish global recovery caused the nation’s exports to fall at the fastest rate this year.
The Bloomberg Israel-US Equity Index of the most traded Israeli companies in New York tumbled 4.6 percent to 78.22 last week, the largest five-day decline since May 18. Allot Communications Ltd. and Ceragon Networks Ltd., the technology developers that received most of their revenue from European and Asian customers in 2011, pushed the index lower. EZchip Semiconductor Ltd. traded at the biggest discount to shares in Tel Aviv among the dually-traded companies. Ceragon and EZchip fell to their lowest close since February in Tel Aviv today.
Consumer sentiment in the U.S. fell to the lowest in 2012 last week, while China’s growth slowed to the weakest pace since 2009. Europe, Israel’s largest trading partner, remains divided over how to solve a three-year debt crisis. Israel, which gets about 40 percent of its gross domestic product from exports, posted the widest trade deficit in five months in June as products sent to other nations dropped 11.9 percent to $3.3 billion, the Jerusalem-based Central Bureau of Statistics said on its website July 12.
“Investors have been watching the global slowdown cautiously to see how it would impact Israel,” Chaim Fromowitz, executive vice president of Bank Leumi USA, said by phone from New York on July 13. “Now we’ve seen it’s hurting exports and that’s caused concern for companies exposed to more China slowdown and Europe issues. The U.S. numbers aren’t good either. It’s all impacting the mood.”
Israel’s TA-25 Index lost 0.8 percent today, to close at the lowest level since June 28. The gauge has fallen 2.5 percent in this year, compared with a retreat of 3.7 percent for the Israel-US Equity Index.
Israel’s seasonally-adjusted trade deficit climbed to $1.85 billion in June from a revised $1.63 billion the previous month, according to Israel’s Central Bureau of Statistics.
The European Union accounted for 32 percent of Israel’s exports, excluding diamonds in May, the U.S. 22 percent and Asia 21 percent, according to a June 18 statement. Israeli growth is expected to slow to 3.1 percent this year, from 4.8 percent in 2011, according to the Bank of Israel.
Confidence among U.S. consumers dropped to 72 this month from June’s 73.2 reading, the Thomson Reuters/University of Michigan index of consumer sentiment showed on July 13. The gauge was projected to rise to 73.5, according to the median forecast of 69 economists surveyed by Bloomberg News.
China’s gross domestic product expanded 7.6 percent last quarter from a year earlier, the National Bureau of Statistics said yesterday from Beijing. The pace, a three-year low, compares with a 7.7 percent median forecast of economists.
Allot, the Israeli maker of software to regulate traffic on networks, slid 17 percent to $22.31 in New York, the biggest five-day retreat since Aug. 19. The Tel Aviv stock dropped 18 percent last week. The shares lost 1.8 percent to 88.72 shekels, or the equivalent of $22.43 today.
The Hod Hasharon, Israel-based company derived 49 percent, or $38.4 million, of its revenue from Europe in 2011. It received 17 percent, or $13.4 million, from Asian countries, data compiled by Bloomberg show.
Allot will probably say sales increased to $25 million when it reports second-quarter earnings on July 31, up from $18.5 million in same period last year, according to the mean estimate of 11 analysts surveyed by Bloomberg.
Ceragon, the Tel Aviv-based maker of wireless networks, tumbled 8.1 percent to $7.88 in the U.S. last week, the sharpest five-day decline since May. The shares dropped 1.7 percent to 31.28 shekels, or $7.91, in Israel today.
The Europe, Middle East and Africa region made up 39 percent of the company’s sales in 2011, compared with 27 percent for the Asia-Pacific region, data compiled by Bloomberg show.
EZchip, the Israeli technology company that supplies network processors to Cisco Systems Inc., slid 17 percent last week to $32.26. Before today, the shares traded at a discount of $1.66 versus the Tel Aviv stock. They declined 4.3 percent to 128.5 shekels, or $32.48, in Israel today.
Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.