The Ticker: Fading Brexit Fears Lift Tel Aviv Market Higher

Alon asks court to null bondholders’ repayment deadline, Nigeria pays Housing & Construction debt – after big devaluation, and three banks see nearly NIS 900m in gains from Visa Europe sale.

A campaigner for the "Leave" campaign stands on the Westminster Bridge in London, U.K., June 15, 2016.
Luke MacGregor, Bloomberg

Fading Brexit fears lift Tel Aviv market higher

Tel Aviv shares rose sharply on Monday, tracking gains in global stocks, after polls showed support for Britain staying in the European Union regaining momentum before Thursday’s referendum in the United Kingdom. The benchmark TA-25 index ended up 1.2% at 1,430.39 points, while the TA-100 gained 1% to 1,238.22 on turnover of 1.65 billion shekels ($428.4 million). The euro strengthened more than 0.5% on the shekel to a Bank of Israel rate of 4.3627. Africa-Israel Investments extended its rally a third session, closing up 8.5% at 1.18 shekels. Kerur Holdings rose 4.5% to end at 73.35 after it announced a 60-million-shekel share buyback. Magic Software rose 3.5% to 26.50 after it said it bought 60% of Roshtov for $21 million. Perrigo fell 1.8% to 372.80 shekels and was the most active share of the day after Argus downgraded the shares to a Hold from a Buy. Telecoms shares were the only sector to end lower, with B Communications leading the way lower on a 1.1% decline to 86 shekels.

Alon asks court to null bondholders’ repayment deadline

Two days before a deadline set by bondholders to repay 1.75 billion shekels ($454.4 million) in debt, Alon turned on Monday to the Central District Court to declare it null and void or to cancel it. Alternatively, Alon – the closely held investment vehicle controlled by Shraga Biran, David Weismann and the kibbutz purchasing organization – asked the court to delay any action of repayment for at least 12 months. The petition comes after bondholders cited the drop in Alon’s credit rating in January to seek immediate repayment of the debt, which would effectively wrest control of the company from its owners. Alon told the court Monday that bondholders had no legal right to demand repayments and, even if they did, their demand was unreasonable and would hurt the company and its investors. Attorneys said the company, which is about to sell control of publicly traded Alon Blue Square, was solvent and had met all its obligations to date.

Nigeria pays Housing & Construction debt – after big devaluation

After waiting a year to be paid a debt from the Nigerian government, the Israeli construction company Housing & Construction (aka Shikun & Binui) reported Monday that it finally received payment – and that it was 30% less than the original sum thanks to a conveniently timed currency devaluation. The debt was for 17 billion nairas, which was worth $85 million until Monday, when the currency plunged 23% against the dollar after the central bank announced it was removing its currency peg to alleviate foreign currency shortages. As a result, Housing & Construction said, it received $65 million. The company said Nigeria had repaid between 80-90% of back debt it owed, which at the end of the first quarter amounted to 462 million shekels ($120 million), including debt not in arrears. Current contracts include automatic compensation for deviations as well as for new debts, said Housing & Construction. The firm also added it had contracts for Nigerian projects worth 6 billion shekels. Housing & Construction shares ended 4.7% higher at 6.62 shekels.

Three banks see nearly NIS 900m in gains from Visa Europe sale

Three Israeli banks said Monday they expected to see gains of close to 900 million shekels ($233.7 million) from the sale of their shares in Visa Europe. Leumi said it expected gains equivalent to 439 million shekels from the sale – nearly 300 million shekels in cash now and the rest in deferred payments of cash or Visa shares. Leumi will get the proceeds directly because it was a shareholder in Visa Europe, not its Leumi Card credit card unit. It said it was still examining the impact of the gain on its second-quarter results. Meanwhile, Israel Discount Bank and First International Bank of Israel said they would together enjoy gains of 446 million shekels – 307 million shekels in cash now and the rest later. The three banks, as well as Bank Hapoalim – which didn’t disclose any news Monday regarding any gains from a sale – are earning the profits from the $21.2 billion sale of Visa Europe to its parent company, a deal that was announced last November.