Business in Brief / Dollar, Euro Gain on Israeli Growth Worries

China turmoil, Fed weigh on Tel Aviv market.

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Bank of Israel Governor Karnit Flug holds up a newly designed 50 shekel banknote. September 10, 2014.
Bank of Israel Governor Karnit Flug holds up a newly designed 50 shekel banknote. September 10, 2014. Credit: Reuters

Dollar, euro gain on Israeli growth worries

The dollar and euro both rose strongly against the shekel on Wednesday amid concerns about a slowing Israel economy. The U.S. currency advanced 1.3% to a Bank of Israel rate of 3.878 shekels, its highest against the shekel in two months, and was trading at 3.678 late in the day. The euro climbed 1% to 4.287 and was at 4.2775 in late trading. Currency trader FXCM ascribed the shekel’s weakness to a preliminary government report earlier in the week that showed Israel’s economic growth for the second quarter at a tepid annualized rate of 0.3%. The concerns were underscored on Tuesday by a Bank of Israel report that inflation would be just 0.7% over the next 12 months. “The data increase the odds that the Bank of Israel will take more determined steps, such as negative interest rate and quantitative expansion,” FXCM said, adding that the shekel-dollar rate would for now settle in the 3.85-3.90 band. (Dror Raich)

Azrieli net operating income rose 9% in Q2

Azrieli Group, Israel’s biggest shopping mall owner and operator, saw its net operating income rise 9% in the second quarter from a year earlier despite concerns about Israelis shopping less. Net operating income reached 306 million shekels ($79.1 million); net operating income discounting new properties rose 5% to 294 million. “Over 2015 we have been experiencing increased turnover from mall tenants and high demand for offices at Tel Aviv’s Azrieli Center, Herzilya Business Park and projects we developed in the Sharon region, Rishon Letzion and Holon,” CEO Yuval Bornstein said.  Net profit fell 6%, to 46 million shekels after Azrieli booked a big gain from the sale of its Tambour paint unit. Discounting that, net rose 24% year-on-year, it said. Azrieli shares closed up 1.4%, at 164.60 shekels. (Michael Rochvarger)

Gazit Globe earnings flat for quarter

Gazit-Globe, Israel’s largest real estate company, on Wednesday reported slightly lower second-quarter profit as currency effects offset higher rental income. Funds from operations, or FFO, were 162 million shekels ($42 million), versus 163 million a year ago as a weaker euro and Brazilian real harmed its profit. Rental income grew 23% to 1.51 billion shekels, while net operating income rose 25%, helped by the consolidation of its Atrium European Real Estate subsidiary. Gazit-Globe shares  fell 1.2% to end 44.25 shekels. (Reuters)

Zim boosts profit, despite decline in revenue

Revenues were down in the second quarter, but Zim Integrated Shipping Services still boosted profit as it closed a money-losing route between Asia and northern Europe, cut costs and enjoyed the decline in global energy prices. Zim said Wednesday it squeezed out a $10 million profit in the three months, turning around from a $69 million loss a year earlier. But revenues were down 13%, to $763 million, as cargo carried dropped 6.3% after it closed the money-losing route. Zim also suffered from declining demand on its Asia-Mediterranean route and a 5.4% drop in shipping rates. Earnings before interest, taxes, depreciation and amortization jumped 130% to $67 million. Shares of Kenon Holdings, which controls a third of Zim, fell 0.3% to 59.82 shekels ($15.47). (Yoram Gabison)

China turmoil, Fed weigh on Tel Aviv market

China’s stock market turmoil rattled Tel Aviv again on Wednesday, with telecoms stocks leading the market lower. Expectations that the U.S. Federal Reserve would be moving soon to raise interest rates also factored in to the decline. The TA-25 and TA-100 indexes each lost about 0.7% to finish at 1,708.71 and 1,492.28 points, respectively, on turnover of 1.16 billion shekels ($300 million). Amit Rosenzweig of Halman Aldubi said that even if the Fed raises rates, the Bank of Israel won’t match it and investors will continue to pour money into stocks and corporate bonds. Partner Communications tumbled 7.8% to 18.12 shekels. Cellcom Israel wasn’t far behind, dropping 6.5% to 25.85. EZchip led gainers, climbing 2.9% to a close of 84.27. Kardan jumped 11.6% to 1.05 shekels after it sold a Chinese building for 68 million euros ($75 million). (Dror Raich)