Business in Brief: Tel Aviv Shares Rally on Fed Rate Decision

Analyst sees big increase in bank dividends next year; Mylan shares rise sharply despite Congressional grilling of its CEO.

Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014. Bloomberg

Tel Aviv shares rally on Fed rate decision

Tel Aviv joined the global market party on Thursday after the U.S. Federal Reserve kept interest rates unchanged and projected a less aggressive path for hikes in the future. The TA-25 and TA-100 indices both ended the day up 1.5% to 1,461.56 and 1,281.36 points, respectively, getting a big boost after Wall Street opened. “Markets are getting support not only from the inaction of the Fed but also the relatively dovish comment by Janet Yellen,” said Philippe Gijsels, head of research at BNP Paribas Fortis.The news sent the dollar lower by 0.5% against the shekel to a Bank of Israel rate of 3.7590 while bond prices rallied. The treasury’s 10-year Shahar rose 0.44% to lower its yield to 1.71% and the Galil for the same term advanced 0.48% to a rate of 0.38%. The sharpest gains were for real estate stocks: Housing & Construction Limited rose 4.3% to 7.03 shekels and Gazit Globe gained 4% to 36.79. SodaStream was the top gainer for TA-100 shares, adding 6.65% to end at 102.60. (Omri Zerachovitz)

Analyst sees big increase in bank dividends next year

Israeli banks will boost their dividend payouts next year after the Bank of Israel signaled last week it was satisfied with their financial metrics, Alon Glaser, banking analyst at leader Capital Markets said in a report this week. Israeli banks have had to get all payouts approved by the central bank since the 2008 financial crisis and two of them – Bank Leumi and Israel Discount Bank – have been refused while Bank Hapoalim and Mizrahi Tefahot have been permitted to pay only modest dividends of 15-20% of net profit. Glaser said Hapoalim is the most anxious of the banks to boost dividends but that Banks Supervisor Hedva Ber will probably wait to grant approval until the U.S. investigation into the bank’s role in helping clients evade taxes is completed. Still, he estimated Hapoalim’s payout will grow to 40-50% in 2017. Mizrahi’s dividend will probably grow to 35% while Leumi and Discount will pay 20%, Glaser predicted. (Michael Rochvarger)

Mylan shares rise sharply despite Congressional grilling of its CEO

Shares of Mylan, the U.S. drug maker whose shares are traded on the Tel Aviv Stock Exchange, climbed on Thursday even as its CEO was skewered in Congress for alleged price-gouging of its EpiPen allergy treatment. Mylan CEO Heather Bresch infuriated lawmakers as she tried — and mostly failed — to explain steep price increases of EpiPens. Bresch said she wished Mylan had “better anticipated the magnitude and acceleration” of the rising prices for some families. “We never intended this,” Bresch said, but maintained that her company doesn’t make much profit from each emergency allergy shot and signaled the company has no plans to lower prices. Outraged Republican and Democratic lawmakers on Wednesday grilled Bresch about the emergency allergy shot’s sky-high price and the profits. The list price of EpiPens has grown to $608 for a two-pack, an increase of more than 500% since 2007. Mylan shares closed up 3.1% to 161.20 shekels ($42.92) on the TASE. (AP)