Subscribe to Print Edition | Wed., July 08, 2009 Tamuz 16, 5769 | | Israel Time: 02:34 (EST+7)
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Investment bank HSBC predicts that NICE Systems' second-quarter financial statement, to be published on July 29, will be a sorry thing. Analyst Avshalom Shimel lowered the company's 12-month price target from $34 to $32, but maintained an Outperform rating nonetheless. Why? Because Shimel foresees recovery in the company's fortunes come the second half of 2009. True, Nice was slammed by the pullback in IT expenditure as the global economic crisis bit deep, but Shimel thinks it's positioned to be the first to crow when the rebound comes. Meanwhile, second-quarter revenues are likely to sink nearly 10% against the parallel quarter to $140.3 million, he estimates, which is a hair above the company's guidance. (Nir Zalik)

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The public seems to be regaining its nerve. Mutual funds have raised NIS 700 million so far in July 2009, following an NIS 720 million redemption of short-term Bank of Israel notes (makams), according to Meitav. The favorite among the general public seems to be mutual funds specializing in corporate bonds and in government bonds, or general funds. Mutual funds specializing in fixed-income bonds are also quite the rage. (Yuval Maoz)

Discount Bank has to elaborate how it means to improve its capital adequacy ratio, says Supervisor of Banks Rony Hizkiyahu. Discount has the lowest capital adequacy ratio in the sector, at just 10.45% at the first quarter's end, says the supervisor. That's the ratio between the capital the bank has to keep in reserve as a cushion, against risk - mainly credit going sour. The Bank of Israel wants Israel's banks to maintain a minimal ratio of 12%. Part of the trouble is aggressive lending from early 2008. During last year the bank's lending to the public grew by nearly 15%, twice as much as the growth in credit at competitors Hapoalim and Leumi. During the first quarter Discount's credit to the general public grew by another 3%. (Sharon Shpurer)

It's the first stock offering this year, if we leave private placements out of it: Smallcap biotechnology firm Can Fite hopes to raise a modest NIS 15 million in an offering of stock and warrants. Its offering will be led by Clal Underwriting. It's earmarking the proceeds to finance Phase II clinical trials for its flagship drug, a treatment for dry eye syndrome, which is a chronic inflammation of the tear glands. (Sharon Shpurer)

ITL has won a international tender originating from somewhere in central Asia to supply military electro-optical systems and night-vision systems. The order is a big one, worth about NIS 45 million. Delivery is scheduled for this year and next. An ITL associated company is in parallel contending for another order for 70 night vision systems for the same client, but, as ITL begs to point out, that part of the deal isn't in the bag. (TheMarker)

Deutsche Bank Securities yesterday maintained its Hold recommendation for Makhteshim-Agan, and 12-month price target of NIS 17. Analyst Richard Gussow attended the agrochemicals maker's second annual Capital Markets Day event in London, at which "management confirmed that 2009 is becoming an increasingly challenging year," Gussow wrote. Exchange rates are unfavorable, weather conditions are inclement and then there's that pesky global financial crisis, all of which are doing bad things for Makhteshim-Agan's figures. "While lower yields in 2009 could translate into higher crop prices in 2010, we believe there is still too much uncertainty surrounding the sector at present," Gussow concludes. (TheMarker)

That's good compared with Deutsche Bank Securities' view of Africa Israel Investments, which is that investors should shed the stock. While the real estate firm closed trading last week at more than NIS 70 per share, Deutsche's target for the stock is just NIS 35. Sell, counsels analyst Dan Harverd. The company has been working at reducing debt while preserving equity and isn't looking at shareholder value now, says Harverd. To scale back its towering debt Africa Israel has been selling assets and has reduced its development activities, which is good for bondholders but not for shareholders. It's been skilful at weathering the crisis, he says. Even so, while predicting the company's survival, "We see it emerging with a much narrower asset base yet still carrying considerable debt," he writes. (TheMarker)

Tower Semiconductors has lost about a billion dollars in the last 10 years, but its chief executive Russell Ellwanger believes that era may be over soon. Ellwanger took the reins in 2005, fired 400 of 1,400 workers over time and oversaw the acquisition of foundry Jazz. For the first quarter of 2009 Tower posted a loss of $27 million. Yet toward the end of next year, he predicts, the chipmaker of Migdal Ha'emek will turn profitable, he tells TheMarker. We shall see. (Shmuel Shuster)
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