Markets in Brief

What happened Friday morning was that Africa Israel issued a de facto earnings warning, says Clal Finance analyst Yuval Ben-Zeev. How? Because of the figures it predicts for its subsidiaries. Africa Israel Properties, in which the parent company owns a 67.8% interest, predicts a net loss of NIS 250 million for the fourth quarter of 2009. AFI Investments, which is the group's arm in Russia (71.7%), expects to lose $215 million in net terms in the last quarter, because of property value writedowns. Was it a surprise? "Yes, we were surprised," Ben-Zeev answers himself. For the second quarter of 2009 Africa Israel posted a loss of NIS 1.5 billion and for the third, a loss of NIS 390 million. Both were because of writedowns, after which Ben-Zeev at least hadn't expected more, at least not on this scale. Moreover, information from AFI a month ago had indicated that Russia's real estate market was stabilizing, Ben-Zeev says. But is he "very" surprised? Naw. He points out that Africa Israel should still post a profit for the fourth quarter of 2009 despite its NIS 760 million share in the losses. (TheMarker)

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The Tel Aviv Stock Exchange temporarily suspended trading in Clal Biotechnology Industries shares after the company announced the acquisition of 100% of Biomedical Investments for NIS 84 million. The acquisition, agreed upon on February 28, will be for cash and shares totaling compensation of NIS 28 million. The sellers include Teva Pharmaceutical Industries, Arison Holdings and quite a few others. Consummation is scheduled for April 14 at the latest. (TheMarker)

Bank Leumi has agreed to lend $210 million to the two IDB group companies buying the HSBC headquarters building, which is on 5th Avenue in Manhattan. The companies in question are Property & Building, and Discount Investment Corp. The acquisition is expected to be consummated this April. The 10-year loan will be extended by the bank's U.S. branch, and will be backed by the property itself, as well as guarantees. (Vadim Sviderski)

Ratio Oil Exploration has acquired 10% of the rights to the Sarit oil exploration prospect, which is on land, not on the seabed for a change, next to Ashdod. Once the transaction is complete, Ratio will own 25% of the rights to the Sarit prospect. It will be paying the seller, Lapidot-Heletz, $160,000 plus VAT for the pleasure. The transaction remains subject to the approval of the relevant authority at the Ministry of National Infrastructures, and will leave Lapidot-Heletz owning 52.5% of the prospect. Modiin Energy owns another 22.5%. (Vadim Sviderski)

While on the subject of employment costs at Africa Israel, that of Tzvia Leviev, 33, daughter of Africa Israel's controlling shareholders Lev Leviev, came to NIS 1.5 million in the first nine months of 2009, of which just over half was actual wage cost and the rest, stock options. Her monthly gross is NIS 62,000. (Yael Halak)

Merrill Lynch predicts a good year ("Full steam ahead") for Israel. Let's admit it, says analyst Haim Israel: Israel's economy never did sit comfortably in the category of "emerging market". Its upgrade to developed market is appropriate, in his view. In the long run, he sees Israeli shares benefiting from the reclassification. Even though Israel is a minnow among the developed whales, and the Israeli index will be very low in weight compared with, say, Britain's or Germany's, Haim Israel believes it will outperform. The Israeli economy is strong, stable and has the potential to present relatively high growth, he sums up. (Tal Levy)

While on international investment banks applauding Israel, we cast our glance at Credit Suisse, and not because Nochi Dankner owns a chunk of the Swiss bank. Credit Suisse issued a report on Israel, cooing that its debt-to-GDP ratio is expected to drop and predicting 3.2% growth in 2010. That's optimistic compared with the Bank of Israel, which is predicting 2.5% growth this year. It praised the government for running a deficit of "only" 5.2% in 2009, though it had set the cap at 6%. However, Credit Suisse foresees inflation of 3.2% this year, which is above the price stability target range of 1%-3%. (Tal Levy)

The employment cost of Izzy Cohen as CEO of Africa Israel Investments came to NIS 4.6 million in the first nine months of 2009. The company published the wage figures of its top people pursuant to its deal with bondholders, who it owes about NIS 7.5 billion. Cohen, 59, joined Africa Israel from Migdal in June 2008. His actual wage cost was NIS 2.4 million and the rest is from stock options. Cohen's agreement with Africa Israel gives him a gross monthly wage of NIS 198,000, linked to the consumer price index. He also gets a luxury car and reimbursement of expenses. (Yael Halak)