Blue Square Extends Record Advance: Israel Overnight

Alon Blue Square Israel Ltd. rallied, extending the supermarket operator’s record annual advance in New York, to trade at a premium over its Tel Aviv shares.

Blue Square jumped almost 6 percent to $3.47 in New York yesterday, extending a 12-month rally to 54 percent. The Israel shares narrowed the gap this morning, adding 1.2 percent at 10:03 a.m. in Tel Aviv. The Bloomberg Israel-US Equity Index fell for the first time in three days as SodaStream International Ltd. dropped to a one-week low. Elbit Systems Ltd., an Israeli defense developer, closed at a 0.5 percent discount to its Tel Aviv-traded shares.

Israeli grocers which tumbled in June, including Shufersal Ltd., the nation’s largest supermarket chain, Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. and Blue Square, outperformed the TA-25 Index in Tel Aviv yesterday. Blue Square, which owns the Mega, Shefa Shuk and Eden Nature chains, is trading at 0.7 times book value, or assets minus liabilities, according to data compiled by Bloomberg. That’s about half the valuation of the last five years.

“There has been a bit of a rally in the sector recently,” Zach Herzog, head of international sales at Psagot Investment House Ltd. in Tel Aviv, said by phone yesterday. “People think that maybe the sector is getting some strength and the shares are undervalued.”

The Bloomberg Israel-US gauge slipped 0.7 percent to 90.88 yesterday. The benchmark TA-25 index fell today for the first day this week, declining 0.5 percent to 1,193.51.

SodaStream, a home soda-machine maker, had the largest decline in the index of the biggest Israeli companies in New York. The Airport City, Israel-based company fell 4.2 percent to $67.41.

Elbit, based in Haifa, Israel, rose 1.2 percent to $42.97 in New York. The Tel Aviv-listed shares slipped 0.9 percent to 155.9 shekels, or $42.68.