The Ticker / Sagi to Float Camden Market

Record 12.8% of companies on TASE had ‘going concern’ warnings in third quarter, while Bank Hapoalim chief sees no need for further rate cuts.

Eli Markowitz

Sagi to float Camden Market complex in London

Israeli billionaire Teddy Sagi plans a 100 million-pound ($156 million) initial public offering later this month on London’s AIM of his Camden Market, an 11-acre complex of small retailers, pubs and bars that has long been a gathering place for the city’s hipsters and tourists. The IPO values Market Tech Holdings, the company that owns Camden Market, at $1.2 billion. The IPO will be the fourth for Sagi, who bought the complex and some related Internet sites just a year ago for $850 million. He plans a $470-million expansion of the complex, as well as developing another complex called Camden Lock Village and e-commerce businesses connected with it. Jefferies and Shore Capital are the joint brokers. Israeli institutions can buy into the IPO through Barak Capital Underwriting.

‘Going concern’ warnings on TASE at record high

The percentage of Tel Aviv Stock Exchange-traded companies tagged with “going concern” warnings reached a record 12.8% in the third quarter, according to a report released on Monday by the business research firm BDI Coface. It said the rate was more than three times the 4% it was in December 2008, when Israel briefly sank into a recession in the wake of the global financial crisis. A “going concern” warning is appended to a company’s financial report when its auditors are not sure the business will be able to survive financially. “The stock exchange needs more stable and bigger companies to avoid a situation where one out of every eight companies is in danger of immediate collapse,” said Tehila Yanai, co-CEO of BDI Coface. “That’s how it will improve investor confidence in the Israeli capital market.”

Leumi Partners, Stifel may lead IMI sale

U.S. investment bank Stifel and Israel’s Leumi Partners are the top two candidates to lead the $500 million privatization of Israel Military Industries. By coincidence, over the weekend the two signed a cooperation agreement after more than six months of negotiations, so they may end up working together on the assignment. The agreement will have the two investment banks working together on mergers and acquisitions, securities offerings and research in the United States and Europe. IMI, whose products range from ammunition to guided missiles, will be sold directly to an investor or investor group. Although IMI plays a key role in Israeli defense, the government has agreed that foreign buyers can bid for the company subject to management and other restrictions.

Hapoalim chief sees no need for rate cuts

Further reductions in Israeli interest rates are no longer needed because the government’s strategy of weakening the shekel to help exporters has been achieved, Bank Hapoalim chairman Yair Seroussi said on Monday. The dollar has appreciated close to 18% against the shekel since July, reaching a two-year high of 3.9910 shekels on Monday, after strengthening close to 0.8% for the day. “The target of the shekel’s depreciation has been achieved and this is expected to improve export data,” Seroussi told a business conference. “In light of this, the debate over lowering interest rates [further] needs to be taken off the agenda.” The weaker shekel is expected to give a boost to Israel’s economy, which is forecast to grow only 2.2% in 2014, down from 3.2% in 2013. The Bank of Israel has held its benchmark interest rate at an all-time low of 0.25% since it reduced rates in July and August.

TA-25 index retreats from record high

The Tel Aviv Stock Exchange’s TA-25 pulled back on Monday after reaching a record high on Sunday as bond prices extended their sharp losses. The benchmark index ended down 0.12% at 1,492.01 points, while the TA-100 lost close to 0.2% to end at 1,325.91 as 1.35 billion shekels ($340 million) in shares changed hands. Biotech stocks ran against the trend, with PhotoMedex jumping 13.8% to a close of 6.70 and Bioline adding another 10.2%, on top of the 29% rally it enjoyed Sunday, to finish at 69 agorot. Bioline reported positive interim results on Monday for a Phase IIa clinical studies on a leukemia treatment it is developing. TowerJazz, which said on Monday it was buying back $45 million of its 8% coupon senior notes originally due next June 30, rose 0.1% to 55.25 shekels. The government’s 10-year shekel bond slumped 0.33% to raise its yield to 2.43%.