The Ticker: Israeli Natural Gas Shares Fall on TASE on News of Major Egyptian Gas Find

Bank of Israel: Financial system stable, but housing sector remains top risk ■ Migdal Holdings CEO Czerninski resigns, to be replaced by Doron Sapir of Migdal Ins. ■ Clal Technology’s Neon expected to raise $100 million in Nasdaq initial public offering

An Israeli gas platform is seen in the Mediterranean Sea.
\ AMIR COHEN/ REUTERS

Israeli natural gas shares fall on the TASE on news of major Egyptian gas find

The shares of the Israeli natural gas partnerships suffered major declines on Wednesday on the Tel Aviv Stock Exchange against the backdrop of a report of a huge new gas find in Egypt’s economic waters that would purportedly be four times Israel’s largest offshore reserve, the Leviathan drilling site. The concern is apparently that a new major natural gas discovery in Egypt would hurt plans to export gas from the Tamar offshore site, which is already in production, as well as Leviathan, which is not yet online. The Israeli partners in Israel’s offshore gas sector took a hit as a result. Delek Drilling shares closed down 5% at 9.25 shekels($2.53). Ratio Oil Exploration fell 6.7% to 2.36 shekels and Isramco lost 2.6%, ending the day at 38 agorot per share. The Oil and Gas index fell 3.7% to 908.16 points. Egyptian media reported recently that the Italian energy firm Eni would announce the find at an exploration site dubbed Noor, which reportedly contains about 2,500 billion cubic meters of natural gas, three times the size of Egypt’s Zohr site discovered three years ago. The Israeli Leviathan site contains about 600 billion cubic meters of natural gas. (Eran Azran

Bank of Israel: Financial system stable, but housing sector remains top risk

Israel’s financial system remained stable in the first half of 2018, with exposure to the housing market the “most conspicuous vulnerability,” the Bank of Israel said on Wednesday. The stability of the financial system is supported by a strong economy and a positive business cycle, the central bank said in a semi-annual financial stability report. It noted that a slowdown in the housing market had hurt companies in the residential construction industry, with sales down and an increase in the stock of unsold homes. But the effect on banks was currently minimal. At the same time, it pointed to the end of a long period of “almost constant price increases” in global and Israeli financial markets with higher volatility due to monetary tightening by central banks. The report also said that most industries in the business sector have improved, reflected in improved financial ratios. Banks have also improved the quality of credit portfolios while recording higher than required liquidity coverage ratios. The economy is forecast to grow about 3.5% in 2018. (Reuters)

Migdal Holdings CEO Czerninski resigns, to be replaced by Doron Sapir of Migdal Ins.

Migdal Insurance and Financial Holdings’ CEO, Eran Czerninski, announced his resignation on Wednesday after three years in the position. He is to be replaced by Doron Sapir, the CEO of Migdal Holding’s insurance subsidiary, Migdal Insurance, who will also stay on in his current job. In the process, Migdal will return to its historical management model, which was changed when Shlomo Eliahu acquired control of the holding company. Czerninski has been with Migdal for a total of 25 years. Migdal shares closed down 0.9% to 3.18 shekels (87 cents) in Wednesday’s trading. (Assa Sasson)

Clal Technology’s Neon expected to raise $100 million in Nasdaq initial public offering

Oncology therapeutics firm Neon Therapeutics, in which Clal Biotechnology Industries has had a 5% stake, has concluded the pricing process on an initial public offering of 6.26 million shares on the Nasdaq exchange at $16 a share, reflecting a company value $450 million after the money. The offering is expected to raise $100 million. Neon gave its underwriters a 30-day option for up to 937,000 additional shares and the $100 million figure excludes the option. Following the IPO, Clal Biotechnology’s stake in Neon will drop to 4%. Trading in the shares of Neon, which is based in Cambridge, Massachusetts, began on Wednesday. Its technology was developed through research conducted by the Broad Institute, which was established by Harvard University and MIT and by Boston’s Dana-Farber Cancer Institute. Neon has lost $112 million since its founding. (Yoram Gabison)

TASE edges higher in Wednesday trading 

The benchmark Tel Aviv-35 index edged up 0.3% to 1,530.25 in Wednesday’s trading on the Tel Aviv Stock Exchange. The broader Tel Aviv-125 was up by just 0.01% at 1,372.68. Trading volume was 1.25 billion shekels ($342 million). The Oil and Gas index fell 3.7% on news of a potential major Egyptian natural gas find that could put a dent in Israel’s gas exports. (See report above). On the bond markets came news that Paz Oil has raised 650 million shekels ($178 million) in the institutional bidding stage of index-linked Series Zayin bond on demand of 824 million shekels. The brisk demand prompted the company to expand the offering to 750 million shekels, subject to confirmation from the Ma’alot S&P ratings firm that it would not hurt Paz’s credit rating. The company intends to raise another 100 million shekels in bonds in the Series from the public. (Jasmin Gueta and Yoram Gabison)