Business in Brief: Wall Street Pushes Tel Aviv to 3-month High

Roi partners in talks with U.S. company to begin exploratory drilling; S&P affirms Israel’s credit rating; Stratasys turns in disappointing quarter; Mizrahi sells mortgages to Phoenix.

Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014.
Bloomberg

Wall Street pushes Tel Aviv to 3-month high

The Tel Aviv Stock Exchange’s benchmark TA-25 index closed at its highest in over three months Sunday after the S&P 500 and Nasdaq closed at record highs Friday on robust labor market data. The TA-25 rose 1.1% to finish at 1,472.97 points and the TA-100 added 1% to 1,287.99, but turnover was a low 458 million shekels ($119.4 million).

The market was lifted by gains of 4.1% for TowerJazz to 57.35 shekels, 3.5% for Frutarom, up 3.5% to 19930 and Israel Chemicals, which advanced 2.1% to a 15.30 close. Dual-listed shares also rallied, with SodaStream climbed 4% to 109.40 and LivePerson leading TA-100 stocks for daily gains on a 6.4% rise to 27.43.

But cellphone carriers were down, with Partner Communications losing 2.2% to 18.19 and Cellcom Israel falling 1% to 26.40. Mazor Robotics ended a string of gains over the last several sessions to finish down 3.2% at 42.70 in heavy trading. (Uri Tomer)

Roi partners in talks with U.S. company to begin exploratory drilling

Ratio, Edison of Italy and Israel Opportunity are in talks with the U.S. firm Atwood Oceanics to begin drilling at their Roi license offshore Israel, TheMarker has learned.

If the talks lead to a contract, it would mark the first new exploratory drilling in Israeli waters in three years.  Ratio told the Tel Aviv Stock Exchange Sunday that under the terms of the partners’ license, they have to sign a drilling contract by October 15 and begin work within two months after that.

The U.S. company’s Atwood Advantage drilling vessel is already contracted to do work at the Tamar site, so it is a natural to do the same work at Roi, which is located close to Egyptian economic waters about 150 kilometers offshore Ashkelon.

Edison, which is owned by the French utility EDF, has a 20% stake in Roi, with an option to double it. Ratio shares ended up 1.4% at 29 agorot (8 cents). (Eran Azran)

S&P affirms Israel’s credit rating

The international credit rating agency Standard & Poor’s over the weekend reaffirmed Israel’s A+/A-1 rating and termed its outlook Stable, despite a volatile world economy.

“We expect the Israeli economy to weather potential volatility in the global economy and international financial market, thanks to its diversified economy, strong external position, and flexible monetary framework,” it said, forecasting that the Israeli economy will grow at an average rate of about 2.5% annually in 2016 to 2019. S&P said it expected the budget deficit this year to be below 3% of gross domestic product.

The main challenge facing the economy, it said, is the continued rise in the price of housing, which have so far resisted the government’s efforts to contain them. It was the second time S&P has affirmed its rating since a delegation visited in June 2015. (TheMarker Staff)

Stratasys turns in disappointing quarter

Stratasys, the U.S.-Israeli maker of 3-D printers, suffered another poor quarter.

The company reported on Thursday that adjusted for amortization costs and nonrecurring costs its second-quarter net income fell 22.5% to $6.2 million, or 12 cents per diluted share, from $8 million, or 15 cents, a year earlier, while revenues fell 5.6% to $172.2 million.

“We continue to see weak market demand and longer sale cycles, resulting in slow hardware sales across all regions and business units,” Chief Financial Officer Erez Simha told analysts in a conference call. Stratasys said it aimed to improve its operating structure this year, which will bring it improved operating margins.

Revenues did not meet the $176.7 million expected by analysts polled by Zacks Investment Research, but adjusted profit was ahead of their forecast for 7 cents a share. Stratasys shares bounded back from a low on Thursday to gain 3.1% Friday in New York and closed at $20.15. (TheMarker Staff)

Mizrahi sells mortgages to Phoenix

Mizrahi Tefahot Bank reached an agreement to sell Phoenix Insurance a package of mortgages it holds worth about 300 million ($78 million).

Under their credit-linked notes agreement, which was reached quietly a few weeks ago, Phoenix didn’t buy the loans outright but agreed to deposit a sum equal to their value with Mizrahi and accept any risk of default. As a result, Mizrahi was able to remove the loans from its risk capital and improve its capital adequacy ratio. The loans are older mortgages with an average of four years left to redemptions and few are in arrears.

It was the second such deal with Phoenix the bank has made this year and follows a 1.5-billion-shekel agreement it made with insurers Migdal and Menora. For insurers, the deals provide a high return of about 150 basis points over yields on government bonds. (Michael Rochvarger)