Business in Brief: Golan-Cellcom Merger Terms Would Hurt Competition, Antitrust Watchdog Says

Bank of Israel holds key rate, pushes back forecast for hike to 2017; Kamad seeks EU approval of lung treatment; Tel Aviv shares end mixed in light trading.

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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.
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. Credit: Bloomberg

Antitrust watchdog: Golan-Cellcom merger terms would hurt competition

Shares of Cellcom Israel rose on Monday, a day after the Israel Antitrust Authority told the wireless carrier that it may oppose the proposed merger with Golan Telecom unless Cellcom can assuage the concerns of the watchdog agency regarding competition in the sector.

IAA officials met with lawyers for the companies, which announced plans in November for Cellcom to buy Golan for 1.2 billion shekels ($310 million). Formal hearings are scheduled for next week.

Since its founding four years ago, discount carrier Golan has pushed down prices across Israel’s mobile market. Cellcom will have to explain to the antitrust agency how it plans to guarantee that Israeli consumers can continue to enjoy relatively low prices after the merger. Closely-held Golan warned that barring the merger would hurt consumers by keeping the market in turmoil and deterring investment.

Shares of Cellcom closed up 2.7% at 22.16 shekels. (Ora Coren and Amitai Ziv)

Bank of Israel holds key rate, pushes back forecast for hike to 2017

The Bank of Israel left its benchmark interest rate at 0.1% on Monday for a 13th straight month and forecast that the rate hikes would only begin rising in 2017.

All 12 economists polled by Reuters had forecast no change by the central bank as Israel’s economy shows signs of recovery and a deflationary trend eases. Bank of Israel economists pushed back their forecast for a rate rise from the fourth quarter of this year to the second quarter of 2017 and estimated the base rate would reach 0.5% by the end of that year, rather than 1% as previously predicted.

“The Bank of Israel is trying to emphasize the anchor remains the global interest rate and that the interest rate gap between Israel and the United States is expected to grow in the future,” said Ofer Klein, head of economics at Harel Insurance. (Reuters)

Kamad seeks EU approval of lung treatment

Nearly two years after phase three clinical trials failed to achieve the main goals set for its inhaled alpha-1 antitrypsin therapy, Israeli drug developer Kamada said on Monday it had applied for marketing approvals for the treatment from the European Medicines Agency.

The application comes after EMA regulators agreed to look at all the data from the trials, not just the endpoint data.

“Based upon orphan designation of the drug, prior discussions with regulators, the strength of these data, the support we get from the key opinion leaders and the patient community and the persistent unmet need in this chronic disease, we are highly optimistic of a favorable outcome,” the company said.

Alpha-1 antitrypsin deficiency, which affects about 2,000 people in Europe, prevents the body from making enough of a protein that protects the lungs and liver from damage, leaving sufferers vulnerable to emphysema and liver disease.

Shares of Kamada ended down 1.1% at 14.49 shekels ($3.78). (Yoram Gabison)

Tel Aviv shares end mixed in light trading

Tel Aviv shares ended mixed in light trading on Monday despite a sell-off of energy stocks a day after the High Court of Justice struck down a key part of the gas framework.

The Oil and Gas index ended down 4.7% at 855.20 points, but the benchmark TA-25 index finished unchanged at 1,475.03 and the TA-100 lost just 0.1% to finish at 1,266.01. Turnover was very low, with just 860 million shekels ($224.6 million) in shares changing hands.

Declines in energy stocks were offset by gains of 1.9% to 44.25 shekels for Opko Health, an 0.9% rise for Elbit Systems, which ended at 363.30 and gains for financial-services shares. Jerusalem Economy finished 3.5% up at 6.50 shekels after reports Sunday that Summit Real Estate would buy half of Bank Leumi’s remaining stake in the property developer. Castro rose 4.9% to 91.12 shekels after reporting an 8.3% increase in sales last year. (Shelly Appelberg)

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