The Ticker: Euro Soars After ECB Cuts Rate, Boosts Asset Purchases

Teva raises funds for M&A; Verint plunges on poor profits; Tel Aviv shares fall.

European Union (EU) flags fly in front of the European Central Bank (ECB) headquarters in Frankfurt, Germany, December 3, 2015.
Reuters

The euro-shekel rate took a roller-coaster ride Thursday after the European Central Bank cut a key interest rate and announced an extension of its monthly asset purchases. Against expectations, the announcement sent the euro soaring globally as financial markets signaled they had expected a more aggressive stimulus program by the ECB. The Bank of Israel euro rate was set at 4.1005 shekels, but in late trading the currency rose as much as 2.2% to 4.195 shekels before pulling back to 4.1767. The dollar, which had been gaining earlier in the day to a Bank of Israel rate of 3.887, lost ground after the ECB decision and was trading at 3.853 shekels late in the day. Yossi Fraiman of Prico Risk Management said he still believed the euro would weaken in the medium term. “The Bank of Israel will resume intervening and support the dollar-shekel rate, which will limit the upside for a shekel appreciation,” he said. (Omri Zerachovitz)

Teva raises $6.75 billion in share issue to fund Allergan acquisition
Teva Pharmaceutical Industries raised $6.75 billion on Thursday in a sale of American depositary shares and mandatory convertible preferred shares, which will help finance its $40.5 billion acquisition of Allergan’s generic-drug business. Teva said the ADSs, each representing one Teva ordinary share, were priced at $62.50 each and the 7% mandatory convertible preferred shares at $1,000. Each convertible share automatically becomes an ADS on December 15, 2018. Underwriters led by Barclays, BofA Merrill Lynch, Citigroup and Morgan Stanley have an option to purchase up to 10% more of the ADSs and preferred shares to cover overallotments. Teva agreed in July to buy Allergan’s generics business for $33.75 billion in cash and Teva shares valued at $6.75 billion in a deal that will vault the company into the top ranks of global drug makers. Teva shares ended down 0.3% at 247.20 shekels ($64.02). (Omri Zerachovitz)

Verint plunges on earnings disappointments
Verint Systems shares tumbled 13% Thursday after the maker of business intelligence and security software turned in earnings under market expectations and said revenue growth would be less than it originally forecast. Verint said third-quarter profit after one-time items fell to $49.3 million, or 78 cents a share, from $51.7 million, or 84 cents, as revenue edged higher to $284.1 million. That was well under the average estimate of analysts surveyed by Zacks Investment Research for earnings of 80 cents and revenues of $298.9 million. CEO Dan Bodner said the company was paring back its sales-growth outlook for this year to about 5%, down from its prediction of double-digit gains. “Looking ahead to next year, while it is too early to provide guidance, on a preliminary basis we are assuming a similar level of revenue growth,” he said. Verint shares were down 13.1% at $13.48 in late-morning trading in New York. (TheMarker Staff)

Tel Aviv shares fall after ECB policy move
The Tel Aviv Stock Exchange joined the world’s markets lower Thursday after the European Central Bank cut rates and expanded its asset-buying program, but not enough to impress investors. The TA-25 and TA-100 indexes both ended down 0.9%, at 1,561.71 and 1,347.63 points, respectively, in heavy trading of more than 2 billion shekels ($530 million). But telecoms did better; Cellcom Israel rose 1.4% to 28.15 shekels and Partner Communications 1.6% to 18.05. Perion Network also ran against the trend, advancing 5.8% to 10.43 shekels and bringing its gain in the three days since it said it was buying U.S. firm Undertone to 13.8%. Among blue-chip losers, Perrigo fell 3.2% to 563 shekels and Israel Chemicals dropped 23.9% to 18.55 shekels. In the fixed-income market, the government’s 10-year Shahar bond fell 0.45% to raise its yield to 2.18%. (Omri Zerachovitz)