(Updates with closing prices beginning in second paragraph.)
March 10 (Bloomberg) -- Israel’s TA-25 benchmark index rallied to the highest in almost three weeks as concerns over the composition of the government faded on reports Prime Minister Benjamin Netanyahu was close to forming a coalition.
The index gained 0.9% percent to 1,237.28, the highest level since Feb. 20, at the close in Tel Aviv. Mellanox Technologies Ltd. and Elbit Systems Ltd. led the gains. The index has rallied 4.4 percent this year compared with a 6.7 percent increase in the MSCI World Index. The yield on the government’s 4.25 percent bonds maturing March 2023 jumped six basis points, or 0.06 percentage point, the most since Jan. 29, to 3.99 percent.
“The market is optimistic following nearly two months of uncertainty since the elections about what form the government would take,” Zach Herzog, head of international sales at Psagot Investment House Ltd. in Tel Aviv, said by phone today.
Prime Minister Benjamin Netanyahu convened the current Cabinet for what he said was probably its final meeting in Jerusalem today, as talks to form a new ruling coalition advanced to their final stage this week. Netanyahu, whose Likud party emerged from January elections with the most parliamentary seats, has until March 16 to form a new government.
A major stumbling block to forming a ruling coalition was overcome when Yair Lapid, leader of the second-place party Yesh Atid, agreed to become the next finance minister, according to his parliament compatriot Yael German, who spoke to Israel’s Army Radio today. Jewish Home leader Naftali Bennett, whose party won 12 seats, is slated to serve as Minister of Industry, Trade and Labor, daily Haaretz reported today, citing unidentified party officials. There has been no official confirmation of the appointments.
--With assistance from Calev Ben-David in Jerusalem. Editor: Robert Lakin