The Ticker: Halman Aldubi Boss Says Bond Market Bubble Ready to Burst

U.S. property companies storm Israeli bond market; MediVie in talks for big distribution pacts; Tel Aviv shares gain on Fed rate speculation.

Cars on a highway in Tel Aviv, December 17, 2013.
Reuters

Halman Aldubi boss says bond market bubble ready to burst

Next year is going to be a turning point for the overbought bond market and investors should be ready to suffer losses, Halman Aldubi investment house Chief Investment Officer Ilan Artzi said yesterday. “Investors need to plan for a change in the markets’ direction and for extreme volatility. The real bubble is on the bond market, so the direction is pretty clear. There’s also a real-estate bubble. Home prices in the world’s big cities are at a record,” he told a year-end press conference.

Artzi, who manages 14 billion shekels ($3.6 billion) of assets, said he remained bullish on shares and that central banks needed to raise interest rates but that in the process they would bring a rapid end to the error of super-low yields. He predicted that housing prices in Israel will stabilize gradually, without dropping sharply. “We’ve gotten to the point that young couple can’t buy a home,” he said. (Eran Azran)

U.S. property companies storm Israeli bond market

Despite rising interest rates and difficulties enticing investors, five U.S. real estate companies have raised a combined 1 billion shekels ($260 million) in debt in the past week, and the real estate investment trust manager KBS is readying a 500-million-shekel bond sale.

Brookland Capital was due to complete a 90-million-shekel issue yesterday after raising 66 million shekels from institutions at an interest rate of 8.5%, and Urbancorp was due to complete its institutional tranche by early next week for 150 million shekels. Spencer Equity Group raised 225 million shekels at 4.9%, the lowest among the current round of issuers, and Strawberry Fields 265 million shekels at 6.4%. Klein Group secured 205 million shekels at an effective rate of 6.9%. U.S. property developers have been one of the big factors behind record debt issues on the Tel Aviv Stock Exchange. Standard & Poor’s Maalot said yesterday that 51 billion shekels in new bonds were sold through November, up 27% from the same period in 2014. (Eran Azran)

MediVie in talks for big distribution pacts

MediVie Therapeutic, a maker of a dental device designed to help women cope with the pain of childbirth, said yesterday it was in talks for two major distribution agreements. The company said it was in talks with the U.S. retailer Toys “R” Us to sell its Laboraide at hundreds of the chain’s Babies “R” Us stores in the United States and elsewhere. MediVie said it was negotiating separately with Ceuta Healthcare International Alliance to sell Laboraide at 440,000 pharmacies in 107 countries it services as a product wholesaler. MediVie also said it was working to set up a U.S. subsidiary to help support sales of the device.

According to the company, the mouthguard relaxes the jaw, shoulder and back muscles and increases the flow of oxygen into the body, easing pain and reducing labor time. Shares of MediVie jumped 12.8% to close at 2.28 shekels (59 cents) on the news.
(Shelly Appelberg)

Tel Aviv shares gain on Fed rate speculation

Tel Aviv shares ended higher amid speculation the U.S. Federal Reserve may hold off on a long-awaited interest rate hike. The benchmark TA-25 index finished 0.16% higher at 1,575.40 points, while the TA-100 added 0.3% to 1,359.57, as turnover reached 1.69 billion shekels ($430 million). Perion Network extended gains from its acquisition of the U.S. digital-ad firm Undertone, gaining 6.2% to close at 9.86 shekels. Paz rose 2.2% to 620 shekels and Strauss Group added 4.1% to 58.25. But Teva Pharmaceuticals, the most active share of the day, lost 1.1% to 248.

Spacecom extended losses since it lost contact with its Amos 5 satellite November 21, ending down 5.4% at 33.26. Oil Refineries said yesterday it raised 450 million shekels in a sale to institutional investors of five-year bonds that received total demand of 680 million shekels. The public tranche is slated for later this week. (Omri Zerachovitz)