Business in Brief: Goldman Sachs Sees Surprise Bank of Israel Rate Cut

Clal responds to charges re Andromeda; Israel Corp. unit buys LatAm power plant; TAT wins $45m contract with Republic Airways.

Bloomberg

Goldman Sachs sees surprise Bank of Israel rate cut

At 0.25%, the Bank of Israel’s base lending rate is already its lowest in history. But Goldman Sachs, defying the consensus of economists said in a report over the weekend, that it expects the central bank to lower the rate a third time in a row on Monday to 0.15%. “We expect the ‘dovish’ central bank to surprise the market once again,” Goldman said in the report. A 10-basis-point cut would “be a strong signal to the market that the central bank is determined to bring inflation back towards the target over the next 12 months.” And if that isn’t enough, Goldman also predicted a second, 10-point reduction, to 0.05% by the end of the year. If the Bank of Israel doesn’t cut the rate, there is a “real risk” that the shekel, which has weakened close to 7% since the end of July, could reverse course, Goldman said. (TheMarker Staff)

Clal says it got only partial data on Andromeda accusations

Clal Biotechnology said on Sunday that documents it was shown at a meeting with representatives of Hyperion gave it little information to assess the validity of the accusations that Andromeda falsified trials of its DiaPep277 diabetes drug. The weekend meeting came a week and a half after the U.S. drug maker that backed out of a potential $550 million purchase of Clal’s Andromeda unit. “The information was shown only in the form of a presentation to Clal representatives, without their being able to see the [original] information or examine it independently, nor were they given free access to the Andromeda knowledge base,” Clal said. Nevertheless, the company said it saw no evidence showing that Clal or any of its employees were involved in any misconduct. Clal, whose shares plunged close to 50% after Hyperion rescinded the deal, jumped 7.5% to 43.42 shekels ($11.87) in Tel Aviv Sunday. (Yoram Gabison)

Israel Corp. unit buys LatAm power plant

Israel Corporation said on Sunday that its IC Power unit, which operates energy projects in Latin America, bought its fourth regional power station, paying $40 million cash for the Puerto Quetzal plant in Guatemala. The 234-megawatt plant, Guatemala’s biggest and a provider of electricity neighboring El Salvador and Honduras, adds to facilities closely held IC Power has in Jamaica, Nicaragua and Colombia. The plants will be able to share generating capacity. All told, IC Power now had 10 plants in Latin America. Israel Corporation, whose A-plus credit ranging was affirmed by S&P Maalot on Sunday, finished up 2.8% at 2,138 shekels ($584.62) in Tel Aviv. (Dror Reich)

TAT wins $45 million contract with Republic Airways

TAT Technologies, which provides services and products to the commercial and military aerospace and ground defense industries, said its U.S. unit, Piedmont Aviation Component Services, had a seven-year agreement to maintain landing gear for Republic Airways aircraft for $45 milion or more. The contract covers the airline’s fleet of 160 Embraer E-175 aircraft and the total value may exceed $45 million. “This contract will position us as a world leading maintenance service provider for Embraer E-170/190 landing gear as the fleet is just entering first wave of major overhaul requirements. It constitutes an important step in our strategy of solidifying TAT Technologies and subsidiaries as world leading service providers,” TAT CEO Itsik Maaravi, said. Shares of TAT rose 3.4% to close at 28.43 shekels ($7.77) in Tel Aviv. (TheMarker Staff)

TA-25 powers to another record higher

The Tel Aviv Stock Exchange’s TA-25 index powered to another record high on Sunday, energized by a higher Wall Street and a budget deal over the weekend. The benchmark index closed more than 0.6% up at 1,456.15 points while the TA-100 advanced 0.4% to 1,307.05 on turnover of 639.5 million shekels ($174.9 million). Israel Chemicals paced the TA-100 higher, rising 3.7% to 29.40 shekels and was also the day’s most actively traded stock. The advance capped a 9.3% rise in the shares in the past six sessions. Bezeq gained 2.8% to a close of 6.58 shekels. On the downside, Mazor Robotics extended its losses over the last nine trading days to nearly 14.5%, losing 3.2% on Sunday to close at 23.93 shekels. In the fixed-income market, the government’s 10-year shekel bond rose 0.12%, cutting its yield to 2.46% while its inflation-linked bond due in 2023 edged up 0.03% to leave its yield at 0.52%. (Shelly Appelberg)