Dollar, Euro Post Big Gains on Shekel a Day After Bank of Israel Intervenes

Business in Brief: Israel Post to list bonds on stock exchange ahead of IPO ■ Frutarom sells krill-oil business of newly acquired Enzymotec to Norwegian company ■ Tel Aviv shares end broadly lower, led by Teva, Israel Chemicals, TowerJazz

100 shekel banknotes.
Aviva Ein Gil

veDollar, euro post big gains on shekel a day after Bank of Israel intervenes

The dollar and the euro both strengthened sharply against the shekel on Wednesday, a day after the bank of Israel intervened in the market. The representative rate for the U.S. currency was set at 3.4520 shekels, a gain of more than 1.2% for the day. In late trading, however, it pulled back to 3.4337. The euro nearly matched that gain, with a 1.15% appreciation to a representative rate of 4.2136. It was trading at 4.203 shekels later in the day. The central bank bought what market sources estimated was about $400 million in foreign currency after the dollar reached a seven-year low against the shekel on Friday. The bank has been under pressure to act amid concerns that the strong shekel will hurt exports.  In addition, the Globes financial daily reported that Nutrien was buying dollar forward contracts to convert the shekels it will be getting for the $700 million sales of Israel Chemicals stock.  The company announced Tuesday that it was selling to Israeli institutional investors.  (Guy Erez)

Israel Post to list bonds on stock exchange ahead of IPO

Israel Post has begun the process of listing its bonds for trading on the Tel Aviv Stock Exchange as a precursor to its eventual privatization, TheMarker has learned. The 400 million shekels ($116.3 million at current exchange rates) in 10-year bonds were sold in 2011 and 140 million shekels of them have been redeemed. But listing them will require the postal service to release quarterly financial reports, instead of annual reports via the Government Corporations Authority. The move comes as the GCA, treasury and Communications Ministry move ahead with plans to sell 20% of Israel Post to private investors and another 20% to the public via an initial public offering that market sources estimated would value the postal service at 2 billion shekels. Trading in the bonds, which is expected to start in April, will lower Israel’s Post’s interest costs and make it easier for it to issue more publicly traded debt. Israel Post declined to respond to the report. (Amitai Ziv)

Frutarom sells krill-oil business of newly acquired Enzymotec to Norwegian company

Less than a week after completing its acquisition of Enzymotec, a maker of nutritional ingredients and medical foods, Frutarom said it was selling the company’s krill-oil business for $26.4 million to Norway’s Aker BioMarine. “Enzymotec activity will be focused on areas which Frutarom views as its main core activities, with emphasis on the growing and profitable fields of infant formula, elderly clinical nutrition, dietary supplements and pharmaceuticals,” Frutarom said. Proceeds of the sale will help cover some of the $210 million Frutarom spent buying Enzymotec. The sale includes forming a strategic partnership with Aker BioMarine in which the Norwegian company will serve Frutarom’s and Enzymotec’s nutraceutical krill oil customers. Frutarom’s Israeli headquarters will be relocated to Enzymotec’s modern plant in the northern town of Migdal Ha’Emek and Enzymotec operations merged into Frutarom’s natural specialty fine ingredients business. Frutarom shares ended up 1.4% at 319.10 shekels ($92.77). (Guy Erez)

Albaad closing Kentucky plant after sustaining years of losses

Albaad, the Israeli company that is one of the three largest manufacturers of wet wipes in the world, is closing a Kentucky plant it hoped would serve as a springboard for widening its product line to feminine hygiene and adult incontinence products. The company said on Tuesday that the plant’s operations would be consolidated into another facility in North Carolina in order to lower costs. The Kentucky plant was bought in 2017 for $15 million from the Tranzonic Group with the aim of turning Albaad into a major player in the sector. But competition, especially in the growth markets of Latin America and Eastern Europe, drove prices lower and the plant posted 20 million shekels ($5.8 million at current exchange rates) in operating losses in 2014 –17.  The setback follows another one last year when a new plant in Dimona, Israel ended up costing more than double the projected cost in construciton and equipment. Albaad ended down 0.5% at 51.35 shekels. (Eran Azran)

Tel Aviv shares end broadly lower, led by Teva, Israel Chemicals, TowerJazz

Tel Aviv shares ended broadly lower on Wednesday, led by declines for Teva Pharmaceuticals, Israel Chemicals and TowerJazz. The TA-35 and TA-125 indices both ended 0.5% down at 1,535.30 and 1,392.90 points, respectively, on turnover of 1.32 billion shekels ($380 million). Teva finished down 3.7% at 72.61 shekels and TowerJazz lost 2.3% to 115. Israel Chemicals was down 1.6% by closing to 15.01 a day after Nutrien agreed to sell its 13.8% stake in the company for 13.60 a share. LivePerson posted the biggest drop among TA-125 stocks, shedding 5.8% to 40.94. Volume leader Elbit System scratched out an 0.7% gain to 480.10 after trading most of the session sharply lower. The only sectors posting gains were banks, led by a 1.2% advance for Hapoalim, and telecoms stocks, where Bezeq rose 2.3% to 5.54 amid a battle underway for control of the company. However, Bezeq parent Internet Gold dropped 1.3% to 34.18. (Guy Erez)