Business in Brief / Bank of Israel Intervenes to Stem Dollar Weakness

Chiron seeking U.S. backers for Liberia refinery, Ben-Moshe loses seat on Discount board and shares trade sideways, bonds recover.

Ofer Vaknin

Bank of Israel intervenes to stem dollar weakness

The Bank of Israel intervened in foreign currency trading for the second time in a week on Monday, leaving the dollar higher for the day. The greenback’s Bank of Israel rate was set at 3.868 shekels, a gain of 0.7% for the day, while the euro lost 0.4% to 4.3099. “The Bank of Israel came back to buy dollars and brought a quick depreciation that brought the shekel to the level of 3.868 to the dollar . Positive economic data from Europe and Germany helped strengthen the euro versus the dollar,” said Yossi Fraiman, of Prico Asset Management. He said that between question marks surrounding the Greek debt crisis and a meeting of the U.S. Federal Reserve’s Open Market Committee next week, the U.S. currency will trade in a band of 3.82-3.95. In late trading, the dollar retreated to 3.8396.

Chiron seeking U.S. backers for Liberia refinery

Chiron Refineries, which provides refinery consulting services, said Monday it had signed an agreement with Aldwych Capital Partners to recruit investors to help it buy an oil refinery in the African country of Liberia. The agreement comes a month after Chiron said it signed a memorandum of understanding with ECOWAS Refinery Liberia, to buy a facility with a capacity of 100,000 barrels a day for about $500 million and to upgrade it. Chiron, which is controlled by Rony Kuperberg, is traded on the Tel Aviv Stock Exchange but has a market capitalization of just 30.7 million shekels ($7.9 million), even after its shares have soared 70% since the announcement about its tie-up with ECOWAS. Chiron, which operates a 100,000-barrels-a-day facility in Cyprus, believes West Africa has huge potential because of its oil reserves and limited refining capacity. Chiron closed up 11.3% at 5.06 shekels.

Ben-Moshe loses seat on Discount board

Moti Ben-Moshe, who was once a partner with Eduardo Elsztain in controlling the IDB group, was pushed a little further out the business on Monday when the directors of Discount Investment Corporation – a key IDB unit – voted him off the board. He was earlier removed as cochairman of the company, which holds IDB’s stakes in Cellcom Israel and Super-Sol, and before that as cochairman of IDB Development Corporation, the company at the apex of the IDB pyramid. His only formal role in the group remains as a director of IDB. Elsztain has until Thursday to accept Ben-Moshe’s offer to buy his 61.5% stake in IDB Development for some 600 million shekels ($155 million) or buy Ben-Moshe’s remaining 16% under the same terms. Elsztain is expected to buy out Ben-Moshe, bringing an end to the year-old partnership. Discount shares jumped 6.7% to end at 7.20 shekels.

Shares trade sideways, bonds recover

Tel Aviv shares traded sideways on Monday, eking out small gains for the day, while bond prices recovered. The benchmark TA-25 index ended the session up 0.2% at 1,707.38 points, while the TA-100 edged up 0.06% to 1,470.86, as 1.36 billion shekels ($351 million) in shares changed hands. In the fixed-income market, the government’s 10-year Shahar bond jumped 0.91% to cut its yield to 2.3%, while Galil inflation-indexed bonds due in September 2023 climbed 1.11%, leaving the yield at 0.34%. Idan Azoulay, chief of investments at Epsilon, attributed the bond sell-off of the last month to a correction in a market that had been mispriced, more than any change in economic forecasts. “I believe that because of the correction and the unlikelihood of any change in the interest rate/inflation environment, the government bond market is close to equilibrium,” he said. Among equity gainers, Mizrahi Tefahot rose 3.6% to 47.43 shekels, while TowerJazz tumbled 3.1% to 56.23 shekels.