Business in Brief / Elbit Sees Earnings Hit From Shekel Weakness

Dollar strengthens to two-year high against shekel; Brainsway in sales pact with French firm.

Eyal Toueg

Dollar strengthens to two-year high against shekel
The dollar and the euro advanced sharply against the shekel Monday, with the greenback reaching its highest level against the Israeli currency in two years. The dollar appreciated almost 1%, to a Bank of Israel rate of 3.7460 shekels, while the euro advanced 0.86%, to 4.7841. In late trading the U.S. currency retreated slightly, to 3.7414. Prico Group’s risk management division said Monday it expected the dollar to settle for a while at about 3.74 before making another move higher. “The pro-dollar trend remains in place above the level of 3.58 to 3.62, which supports the dollar hitting new records,” said Prico. “In view of the sharp rise in the dollar against the major world currencies and against the shekel, the chances of a correction are increasing. However, this correction in exchange rates will be very limited in its movement.” (Eran Azran)

Elbit sees earnings hit from shekel weakness
Elbit Systems, the defense electronics maker, warned Monday that it expected to post an “extraordinary level” of financial expenses for the third quarter based on an initial review of its financial reports. “The company estimates that the impact of the above on the finance expenses for the quarter will be in the range of $15 million to $20 million, and accordingly will have a corresponding adverse impact on the quarter’s net profit,” Elbit said. It attributed the increase to the effect of the sharp depreciation of the shekel on the company’s U.S. dollar derivative activities. The shekel lost about 8.5% against the dollar during the three months prior to September 30. Elbit also cited the impact of the exchange rate differences on various balance sheet items. On the other hand, the shekel’s weakness also benefits the company by making it more competitive, said CFO Yossi Gaspar. Shares of Elbit edged down 0.9% to a close of 227.80 shekels ($60.85) in Tel Aviv. (Eran Azran)

Brainsway in sales pact with French firm
Brainsway, a Jerusalem-based firm whose technology is used to treat depression and other brain disorders, said Monday it has signed an agreement with an unnamed French company to sell or lease its deep transcranial magnetic stimulation system in France. The method has been approved by the U.S. Food and Drug Administration for treating severe depression. Under the agreement announced Monday, Brainsway said it would deal directly with the French company’s customers and pay the company a commission. The French company will enjoy exclusivity in France and the agreement can be terminated by either side at 30 days’ notice. In other news, Brainsway said U.S. insurer Blue Cross Blue Shield will provide coverage for use of its treatment method in Florida, Kansas and Missouri and another health insurer, Tufts, will offer coverage in Massachusetts. All told, the insurers cover about 17 million Americans, Brainsway said. Though Brainsway shares spiked into the double digits during trading Monday, they ended down 2.2%, at 33.49 shekels ($8.95). (Dror Reich)

Teva leads Tel Aviv shares higher
Tel Aviv shares drifted higher Monday in unusually heavy turnover of 1.79 billion shekels ($477 million), with Teva Pharmaceuticals leading the way. The world’s biggest maker of generic drugs ended the session up 2.2%, at 194.60 shekels, on turnover of 192.7 million shekels — accounting for close to 11% of the daily total. Together with Israel Chemicals and tech stocks, Teva lifted the benchmark TA-25 index 0.12% to a close of 1,435.19 points, while the TA-2100 ended up 0.08%, at 1,280.27. Other big gainers included pharmaceutical company Perrigo, which added 12.4%, to a close of 554.80 shekels, and drug discovery company Compugen, which finished 2.6% up at 29.10. Supermarket chain Rami Levy was the biggest loser among TA-100 stocks, shedding 3.5% to a close of 171.10 shekels. In the fixed-income market, the government’s 10-year shekel bond dropped 0.24%, boosting its yield to 2.09%. IDB development Corporation bonds dropped 2.8%, leaving their yield at 8.09%. (Eran Azran)