Cellcom, revenue drops as it faces stiff competition. Photo by Tali Mayer
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Speculators shorting Tel Aviv large-caps: Perhaps spooked by all that missile-rattling, speculators are still betting in droves that Israeli stocks will fall. Open short positions on the benchmark TA-25 index increased by 7% at the end of last week to NIS 1.3 billion. (Note ye though that if all short positions on securities traded on the Tel Aviv Stock Exchange are calculated, they're down 2%.) Which companies were in particular disfavor? Elbit Systems, a maker of defense systems, on which open shorts shot up 62% week over week, and Strauss Group, where short positions increased by 36%. Then there's Cellcom. The mobile communications pack has been deep in the doghouse for months, as competition rears its hairy head, but as last week rolled to a close, open shorts on Cellcom, in particular, had dropped by 16%. Perhaps the speculators feel it's taken more than enough punishment on the market. Among smallcaps, by the way, Retalix is worthy of note with a 1,907% increase in short positions.

Teva recruiting for new laquinimod study: Teva Pharmaceutical Industries is enrolling 1,800 sufferers of multiple sclerosis for another round of tests for its oral drug for the disease, laquinimod. Teva hopes laquinimod will drive profit growth, as competition arises to its blockbuster injectable MS treatment Copaxone, but two previous rounds of clinical trials didn't alleviate MS symptoms as well as hoped. Now Teva will be testing patients at a higher dose of laquinimod, hoping the drug will do better at delaying symptoms of the incurable neurodegenerative disease. The new round of tests is alluringly being called Concerto: the question remains whether investors will hear its music over the clamor of competing oral drugs for MS.

Teva loses one in court: In other Teva news, the Israeli generic drugs giant lost its challenge to Eli Lilly's patents protecting Alimta, a second-line therapy to treat lung cancer, Bloomberg reported. The U.S. court of Appeals ruled that Eli Lilly's patents protecting the blockbuster drug, used in the treatment of nonsquamous non-small cell lung malignant cancer and pleural mesothelioma, are perfectly valid through 2017.

Bank of Israel holds benchmark interest rate: As widely expected, the Bank of Israel held its benchmark interest rate at 2.25% for September. The Israeli central bank sets the policy rate for each month on the last Monday of the preceding month, ergo it just released its decision for September. Economists had generally expected the Bank of Israel to save its monetary ammunition and hold its rate, though a minority anticipated a rate cut. Among its reasons the Bank of Israel cited the increase in housing prices (lowering its benchmark would theoretically lower the cost of mortgages, heating up the housing market even more). Also, inflation indicators are expected to run high in August and September, for seasonal reasons and because the government is raising VAT from 16% to 17% on September 1.

Dratted longevity: An NIS 52 million provision booked because Israelis are living longer than expected reduced Menora Mivtachim to a loss of NIS 94 million for the second quarter of 2012, even though it posted growth in most parameters. Not even the increase in premiums collected during the quarter, in all areas (life insurance, health insurance and so on) could get the company out of the red. In the corresponding quarter the year before it lost NIS 44 million, by the bye. All the insurance companies were hit by the treasury revising its actuarial tables to reflect rather longer life-spans. Menora, for one, warns that it will have no choice but to jack up certain premiums.

Who's in charge at Mizrahi-Tefahot? The supervisor of banks at the Bank of Israel, David Zaken, has summoned all the directors at Bank Mizrahi-Tefahot to personal meetings this week, to discuss the state of corporate governance at the bank. The inquiry began after the press reported that the bank's chief executive, Eli Yones, wrote letters to two directors urging them to quit the board of the bank or that of Carasso Motors, for fear of conflicts of interest. Carasso is a big client of Mizrahi-Tefahot and owes it about NIS 20 million, Yones pointed out. Of concern to Zaken is who exactly supervises who: the board's job is to supervise the CEO, not the contrary; and the board isn't supposed to rubber-stamp management decisions, but to delve into them.

With reporting by Sivan Aizescu, Noam Bar and Oren Freund.