Israeli stocks jumped the most since September 2013 after drugmaker Mylan NV offered to buy Perrigo Co. Shares in Dubai advanced.
The TA-25 Index advanced 1.8 percent to a record close of 1,680.96. Global health-care supplier Perrigo, which has the biggest weighting on the index, surged 22 percent to an all-time high of 793 shekels. Dubai’s DFM General Index rose 1.4 percent.
Mylan NV offered to buy Perrigo for $28.9 billion, or $205 a share in cash and stock, according to a statement on Wednesday. The offer represents a premium of about 25 percent over Perrigo’s closing price for its U.S.-traded shares on April 7, which rose 18 percent on April 8 and closed at $198.55 on April 10. The Tel Aviv Stock Exchange was closed April 9 for the Jewish holiday of Passover.
“Today’s rally is all about the Perrigo buyout offer,” Saar Golan, a trader at Bank of Jerusalem Ltd. in Tel Aviv, said by e-mail. “Mylan’s $205 bid is likely not the end of the story as rival bids may appear and Mylan may need to improve its bid.”
Before Mylan announced its pursuit of Perrigo on Wednesday, it had seemed to be a likely merger partner for Teva Pharmaceutical Industries Ltd. Mylan’s offer is raising questions about whether Teva will seek a transaction with either company or look elsewhere. Shares in the Petach Tikva, Israel-based company added 3.8 percent to a record 263.60 shekels.
Foodmaker Strauss Group Ltd., the index’s biggest decliner by percentage, fell 3 percent, the most since March 15, to 62.13 shekels after Sabra Dipping Co., a joint venture with PepsiCo Inc., recalled about 30,000 cases of its classic hummus over fears the product is contaminated with listeria bacteria.
The TA-25 Index has advanced 15 percent this year, compared with a 4.1 percent gain of the MSCI World Index. All regularly-traded members of the TA-25 closed above their 50-day moving averages in the four sessions through Wednesday, in the longest streak since at least February 2008. The index traded above its 50-, 100- and 200-day moving averages.
“Looking ahead we expect the market to continue its positive momentum and to trade in line with global equities,” Steven Shein, a trader at Tel Aviv-based Psagot Securities Ltd., said by phone.
The S&P 500 increased 1.7 percent last week and is less than 1 percent from its all-time high set on March 2, and the Stoxx 600 rallied 3.8 percent for the week. The MSCI Emerging Markets Index added 0.6 percent to 1,034.59 on April 10, pushing its 10-day advance to 8 percent. It’s the longest winning streak in almost five years.
The yield on Israel’s benchmark notes due March 2024 advanced one basis point to 1.48 percent, the highest level since April 7. The shekel weakened 0.9 percent to 3.9930 on April 10.
Stocks in Dubai closed at the strongest level since March
1. Arabtec Holding Co., the United Arab Emirates’ biggest publicly-listed construction company, led the advance with a 5.5 percent increase. Emaar Properties PJSC, the developer of Burj Khalifa in Dubai, the world’s tallest tower, rose 2.1 percent.
“With international markets in the U.S., Europe and China showing strong gains over the past few trading days, regional equity markets have some momentum in their favor,” Ramez Merhi, a Dubai-based director for asset management at Al Masah Capital Ltd., which manages $500 million, said by e-mail. “Brent crude breaking above the $57 level is also adding to investor confidence.”
Brent crude, the benchmark for more than half of the world’s oil, added 5.3 percent last week to close at $57.87 per barrel on Friday. The six-nation Gulf Cooperation Council is home to about a third of the world’s proven oil reserves.
Elsewhere in the region, the Tadawul All Share Index in Saudi Arabia, the world’s top oil exporter, rose 0.1 percent. Saudi Basic Industries Corp., the biggest petrochemical manufacturer by sales, added 1.8 percent.
The Saudi market regulator suspended Rabigh Refining and Petrochemical Co.’s shares from trading until the company meets disclosure requirements, according to a statement on the Capital Market Authority website.
Kuwait’s SE Price Index and Bahrain’s BB All Share Index increased 0.1 percent each. Abu Dhabi’s ADX General Index and Oman’s MSM 30 Index retreated 0.1 percent each. Qatar’s QE index was little changed.