Business in Brief: Dollar Loses to Shekel Despite U.S. Interest Rate Hike

First International Bank net edged down in fourth quarter due to one-time items; Banks and energy stocks carry Tel Aviv shares lower.

shekels
Israeli shekels are worth more in euro or dollar terms than for many years. Reuters

Dollar loses to shekel despite U.S. interest rate hike

The dollar weakened against the shekel on Thursday, reaching its lowest point in two and a half years after the U.S. Federal Reserve’s interest rate hike the day before disappointed markets. The greenback lost more than 0.7% to a Bank of Israel rate of 3.6310 shekels. Although the rate differential between the United States and Israel was widened by the Fed’s move, the markets were unimpressed by the Fed’s failure to signal future rate rises ahead. “The bar was high for the [Federal Open Market Committee] to deliver a hawkish surprise,” said London-based ING currency strategist Viraj Patel. The euro strengthened against the shekel, adding 0.1% to 3.8916 amid relief over Dutch election results and Bank of England's minutes, which signaled it might be taking a hawkish monetary policy. Sterling strengthened 0.5% against the shekel to 4.4852. The dollar’s unexpected losses Thursday, which bring the year-to-date total to 5%, complicate the Bank of Israel’s efforts to weaken the shekel. (Uri Tomer)

First Int’l Bank net edged down in fourth quarter due to one-time items

First International Bank of Israel, the country’s fifth-largest lender, reported a drop in fourth quarter net profits Thursday due to one-time items. Net profits fell 4.3% to 112 million shekels ($31 million), yielding a return on equity of 6.2%, the bank said. The one-time items included an 18-million-shekel provision connected with the sale of its FIBI Switzerland unit as the bank focuses on its domestic business, and another 18 million for the decreased value of deferred taxes due to lower tax rates. The bank said its ratio of Tier I equity capital to risk assets was 10.09% at the end of 2016, up from 9.81% a year earlier. For the year, FIBI saw profit rise 16.8% to 521 million shekels and a return on equity of 7.2%. The board declared a 70-million-shekel dividend. Shares of FIBI, the first of Israel’s banks to report quarterly results, ended down 1.5% at 60.51 shekels. (Michael Rochvarger)

Banks and energy stocks carry Tel Aviv shares lower

Tel Aviv shares ignored global stock market gains Thursday as bank and energy stocks weighed heavily on the market. The blue chip TA-35 index ended down 0.8% at 1,426.86 points, while the TA-100 shed 0.6% to 1,272.48 on heavy turnover of 1.81 billion shekels ($500 million). Volume leader Teva Pharmaceuticals lost 1.7% to 122.10 shekels. Bank declines were led by Israel Discount, which sank 2.3% to 8.16 and Leumi, which lost 1.6% to 16.54. Among energy shares, Avner fell 1.8% to close at 2.46 and Delek Drilling, 1.7% to 13.15. Oil Refineries tumbled 6% to 1.45 after reporting that adjusted fourth-quarter net profit dropped 34% to 23 million shekels. Foresight extended its gains on the back of the Mobileye-Intel deal, jumping 10.4% Thursday to 3.21. Nano Dimension rose 8.8% to 5.04, marking its third day of sharp gains after it reported the second sale of its flagship 3D printer in two days. (Uri Tomer)