Israeli stocks in New York fell the most since February, led by MagicJack VocalTec Ltd. and Caesarstone Sdot Yam Ltd., as slowing growth in China curbed the outlook for exports and technology spending.
The Bloomberg Israel-US Equity Index of the largest Israeli stocks in the U.S. slid 1.1 percent with trading in Tel Aviv closed until April 17 for holidays. MagicJack, which sells voice-over-Internet technology, sank 4.8 percent, while chipmaker EZchip Semiconductor Ltd. dropped 1.9 percent. Caesarstone slumped 4.2 percent after one of its biggest investors said that it had sold 91 percent of its holding.
China’s economy, the world’s second largest, grew 7.7 percent last quarter, slowing from 7.9 percent in the last three months of 2012. Israel’s government said in 2011 that it would spend 100 million shekels ($27.5 million) boosting exports to Asia as the European debt crisis damps demand from the euro region. Israel has 54 companies traded on the Nasdaq Stock Market, the most of any country beside the U.S. after China.
“When the Chinese economy slows, it’s a sign of a problematic growth environment,” Jacob de Tusch-Lec, a London-based money manager at Artemis Investment Management LLP, which oversees $20 billion in assets including Israeli shares, said by phone yesterday. “That’s not an environment to buy Israeli tech stocks that need capital to grow.”
Israel’s trade deficit, excluding diamonds, is 5.8 billion shekels with 20 percent of exports to Asian countries in February, according to a March 18 report by the Central Bureau of Statistics. Exports to the European Union and U.S. were 38 percent and 22 percent respectively.
The Bloomberg Israel-US gauge has gained 3.5 percent this year, trailing a 6.5 percent jump in the Nasdaq Composite Index and the TA-25 Index’s 3.8 percent increase.
Ten of the 11 technology companies on the Israel-US measure derived at least 2.1 percent of their revenue from the Asia-Pacific region in 2011, according to data from company filings compiled by Bloomberg. The group had the biggest contribution to losses in the index yesterday.
Orbotech Ltd., which makes gear used to test televisions and smartphones, got 82 percent of revenue from the Asia-Pacific in 2011, the most among the companies on the Israel-US index.
The Yavne, Israel-based company will report sales of $90.4 million in the first quarter, according to the mean of four analysts estimates collated by Bloomberg, the least since the three months ended Sept. 30, 2007. Orbotech dropped 3 percent to $9.76 in New York yesterday, the biggest drop since April 1.
Radware Ltd. slipped 1.7 percent to $14.40, extending its monthly loss to 24 percent. The Tel Aviv-based maker of technology that helps networks run efficiently posted first-quarter profit that trailed forecasts as sales in China and the European, Middle East and Africa region slowed, according to an April 5 statement.
MagicJack, based in Netanya, Israel, fell 4.8 percent to $16.42 in U.S. trading, the biggest drop since March 18. SodaStream International Ltd., the Airport City, Israel-based maker of home soda machines, sank 3.9 percent to $50.95.
Caesarstone retreated 4.2 percent to $21.80, the lowest price since Feb. 12. Tene Investment Funds Ltd. sold 91 percent of its holdings in the maker of quartz-based countertops, totaling $800 million, according to an e-mailed statement. Tene was Caesarstone’s second-biggest shareholder with 23.1 percent, as of a Feb. 28 filing, data compiled by Bloomberg show.
Check Point Software Technologies Ltd., the Tel Aviv-based security networks maker, slipped 1.7 percent to $45.74, the steepest drop since March 25.