Partner Sinks as Shekel Falls on Syria: Israeli Overnight

Israeli stocks slid to a six-week low in New York, led by Partner Communications Co. and Cellcom Israel Ltd., as prospects for a U.S. military strike on Syria increased concern tensions in the Middle East will escalate.

The Bloomberg Israel-US Equity Index of the most-traded Israeli shares in New York dropped 3.3 percent as 24 of its 25 stocks fell. American depositary receipts of Partner plunged 8.4 percent, while Cellcom sank the most in 11 months. Gazit-Globe Ltd. decreased 5.1 percent after net income slumped. Gilat Satellite Networks Ltd. traded at the widest discount to its Tel Aviv shares among dual-listed companies. The shekel sank the most among 13 Middle East currencies tracked by Bloomberg.

Israeli shares followed global stocks lower as U.S. Secretary of State John Kerry said yesterday that President Barack Obama believes there must be accountability for the “moral obscenity” of using chemical weapons in Syria. Israeli Prime Minister Benjamin Netanyahu vowed in a televised statement yesterday that his country would “respond powerfully” if it discerns any attempt to harm it.

“The tension with Syria is bringing the market down,” Elah Alkalay, an analyst at IBI-Israel Brokerage & Investment Ltd., said by phone from Tel Aviv yesterday. “The concern is that if the western countries, particularly the U.S., decide to enter the military conflict with Syria, there will be a retaliation against Israel.”

Netanyahu met yesterday with top security officials as the U.S. and allies discussed how to respond to an alleged chemical attack outside Damascus that they blame on Syrian President Bashar al-Assad. Syrian and Iranian officials said this week that a U.S. attack on Syria may draw retaliation against Israel.

Kuwait Invasion

Israel has been caught in similar crossfire in the past. During the first Gulf War in 1991, Iraqi leader Saddam Hussein fired Scud missiles at the Jewish state after the U.S. attacked Iraq for invading Kuwait.

The Bloomberg Israel-US gauge sank to 93.69, the lowest level since July 11. Israel’s TA-25 benchmark stock index add 0.3 percent to 1,159.34 at 11:04 a.m. in Tel Aviv.

Partner, the country’s second-largest mobile operator, plunged the most since Oct. 23, to $7.05 in New York. Trading volume that was almost twice the average of the past 90 days. The Tel Aviv shares this morning narrowed the discount, declining 0.4 percent to 26.03, or $7.10. The company said profit plunged 83% as competition cut into its subscriber base. Cellcom, the second-largest mobile carrier, fell 2.1 percent in Israel today after U.S. shares sank 7.4 percent to $10.31.

Gazit-Globe, a real estate holding company, fell to $12.05, the lowest since Dec. 11. Second-quarter net income dropped to 60 million shekels ($16.4 million) from 288 million shekels a year earlier. The Tel Aviv stock this morning dropped 1 percent.

Gilat, an Israeli defense company, sank 4.2 percent to $4.60, extending a five-day plunge to 11 percent. The Tel Aviv shares followed today, declining 1.4 percent.

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