The Ticker: Israeli Hedge Funds Turned in Strong Performance in 2015

Israeli hedge funds turned in strong performance in 2015 | Partner to launch new branding in place of Orange February 16 | Dollar loses a lot of ground to shekel | Tel Aviv shares turn higher in final stretch of trading.

David Bachar

Israeli hedge funds turned in strong performance in 2015

Israel’s hedge funds outperformed the main stock indexes to which they are benchmarked in 2015 despite last year’s volatile markets, TheMarker has learned.

The TGI index of 43 Israeli hedge funds, which is calculated by Tzur Management, a company that services the industry, showed an 8.2% return for the major funds last year, compared to a 2% increase for the Tel Aviv Stock Exchange’s TA-100 index and an 0.7% decline for the S&P 500.

Yitzhak Raab, Tzur’s managing partner, ascribed the hedge funds’ performance mainly to a successful strategy of longing or shorting Israeli stocks, which returned an average of 13.8% for the industry in 2015. Algorithm-based investments performed the worst, with a return of just 1%.

Tzur estimated that Israel has around 100 hedge funds with combined assets of between $3 billion and $3.5 billion, although about half of that amount is managed by just 13 funds. (Eran Azran)

Partner to launch new branding in place of Orange February 16

Orange CEO Stephane Richard, March 6, 2014
Bloomberg

Partner Communications, Israel’s second-biggest mobile carrier, said Thursday it will launch its new brand, in place of Orange, on February 16. The company offered no details about the new branding but said it would take several months to complete as it introduces the new name and logo to its cellular services, online platforms and sales and service centers.

The company agreed in June to part ways with the French telecommunication group Orange, which had licensed the name since Partner was formed in the 1990s. The breakup came after Orange CEO Stephane Richard said he would be ready to terminate the licensing arrangement “tomorrow morning” if he could in remarks seen as a surrender to the  Israel boycott.

Although Richard insisted otherwise and apologized, Orange agreed to pay Partner 50 million euros ($56 million) in compensation after the two sides agreed to end the agreement.  Partner shares ended down 1.3% at 17.40 shekels ($4.46). (Amitai Ziv)

Dollar loses a lot of ground to shekel

The dollar’s seemingly inexorable rise to 4 shekels suffered a big setback Thursday as the U.S. currency’s weakness pushed it 1.4% lower to a Bank of Israel rate of 3.9090 shekels. Following the same global trends, the euro strengthened a sharp 0.9% to 4.396. 

The dollar lost ground in global markets amid expectations that the U.S. Federal Reserve will not raise interest rates anytime soon after a weak batch of U.S. data and New York Fed President William Dudley’s warning that a weakening outlook for the global economy would have to be taken into account in upcoming rate decisions.

“We believe the dollar has limited potential for strengthening against the shekel. Looking longer term and the inflows of foreign direct investment to Israel, declining energy prices and a local surplus of foreign currency, the dollar could weaken to below 3.80 shekels,” said Yossi Fraiman of Prico Risk Management. In late trading the dollar weakened to 3.9002 shekels. (Omri Zerachovitz)

Tel Aviv shares turn higher in final stretch of trading

Tel Aviv shares broke a steady decline most of the day in the final stretch of trading Thursday to end the session higher. Osem shares soared after Nestle said it would buy out minority shareholders at a 26% premium to the market price (see story on page 16).

The benchmark TA-25 index ended 0.45% higher at 1,454.56 points, while the TA-100 added 0.2% to 1,246.83, as 1.33 billion shekels ($340 million) in shares changed hands.

Among big blue-chip winners, Israel Chemicals advanced 5.1% to 16.60 shekels and Mylan rose 4.5% to close at 205.30. TowerJazz gained 3.2% to 49.76 a day after it issued 3.3 million ordinary shares, equal to about 3% of its share count, to buy Maxim Integrated products for its Texas chip facility.

Energy shares were sharply lower as was Nice Systems (down 4.2% to 233.20) and Bezeq (down 2.6% to 8.02).  In the fixed-income market, the government’s 10-year Shahar bond fell 0.17% to raise its yield to 1.85%. (Omri Zerachovitz)