The Ticker / Provident, Mutual Funds Averaged 5.7% Return in 2014

Bond yields point to low inflation in 2015, Ceragon closes Slovakia plant, and telecom firms again hit the TASE.

Bloomberg

Israel’s provident, or advanced-training, funds enjoyed a good year of returns in 2014, albeit not the double-digit increases they registered in the two previous years. The funds posted an average annual return of 5.7% last year, thanks mainly to lower Israeli and global interest rates. That followed returns of 11% and 12% in 2012 and 2013. Altshuler Shaham Group earned the biggest returns, with its flagship general provident fund returning 34.7% while its top advanced-training fund led its segment with 33.8%. Both funds beat their sector averages by five percentage points. Gilad Altshuler said 2015 should see a return to double-digit growth. “Our working assumption is that interest rates will remain low in 2015. I don’t share the view that U.S. interest rates will rise significantly in the next half year,” he told TheMarker. “All told, stocks will remain key and attractive so that the share market will show high-single-digit growth. That comes for the lack of alternatives.” (Eran Azran)

Bond yields point to low inflation in 2015

Bond-market yields point to Israeli inflation of just 0.5% in 2015, below the government’s target of 1% to 3%, the Bank of Israel said Monday. The figure, based on the difference in yields between inflation-indexed and non-indexed bonds, extends a sharp decline in expectations since September. Yields suggest the consumer price index will creep up to 0.8% in 2016 and enter the target range of 1% to 3% in 2017, when it reaches 1.3%, according to central-bank figures. Economists’ average forecast for 2015 inflation is just a little higher, at 0.6%, compared with deflation last year of 0.2%. M1 money supply jumped 35.6% last year to a record 197.7 billion shekels ($50.5 billion), the central bank said. Low interest rates boosted the money supply by making investing in bonds unattractive. (Moti Bassok)

Ceragon closing Slovakia plant

Ceragon Networks, the financially troubled maker of equipment for operating mobile networks, has closed its plant in Slovakia as part of its cost-cutting measures, TheMarker has learned. Ceragon confirmed in a statement that it was closing the plant as part of a plan, announced last month, to lay off 300 of its 1,100 employees. “The Slovakia plant is part of the production network the company operates in Israel and abroad. But 80% of Ceragon’s manufacturing in based on outsourcing,” the company said. The plant, which Ceragon acquired in 2011 when it bought the Norwegian microwave-radio-system provider Nera Networks, employed 150 at its peak. But Ceragon has long relied mainly on Flextronics Israel for most of its manufacturing. Shares of Ceragon, which reported a third-quarter loss of $3.6 million on sales of $99 million, closed down 2.4% at 3.63 shekels (93 cents). (Dror Reich)

Tumbling telecoms stocks weigh on TA-25

Telecom stocks took another hit on Monday to lead the Tel Aviv Stock Exchange lower for the day. The market was broadly lower, with only banks and insurers showing gains. The benchmark TA-25 index ended down 0.6% at 1,458.75 points while the TA-100 lost 0.7% to finish at 1,2773.56. Turnover reached 1.17 billion shekels ($299 million). A new cut-rate offer for business users by Golan Telecom (see story on this page) marked a new phase in the cellphone-price wars, causing Cellcom Israel shares to tumble 12% to 19.6 and Partner Communications to fall 7.6% to 12.22. Bezeq fell 3% to 6.5 and its parent company, B Communications, by 6.7% to 58.91. The bad news for Cellcom reverberated to its parent, Discount Investment Corp., which ended down 7.1%. Discount’s woes were compounded by a 4.7% drop in another key subsidiary, supermarket chain Shufersal, to 8.12 shekels. (Eran Azran)