Daily Roundup Leumi Suspects Down-trend Will Stay This Week

Teva loses its birth control; Perrigo buys Cobrek; union puts workers on hold at Bezeq.

Ruth Schuster
Ruth Schuster
Ruth Schuster
Ruth Schuster

Leumi sees drop persisting: There is a not-small chance that the downward correction will continue, Bank Leumi equity analysts predicted in their weekly trading review on Friday. They expect investors to cash out and take profit after the recent wave of gains, not least because the fiscal cliff in the U.S. looms larger by the second. Back in the Holy Land, the bank's analysts predict a huge budget cut right after the Israeli elections, which could hurt corporate results and generally speaking, hurt the business sector as a whole. And lastly, considering the level of pricing among the TA-25 large-caps pack and the challenges that many of the companies face, the bank analysts like medium-cap companies this week, not the monsters. The bank also notes that speculators are shorting 18 of the 25 large-caps, up from 13 last week. Clearly Leumi isn't the only one expecting rain on the Tel Aviv Stock Exchange this week.

Banks gained 21% in 2012: The index tracking Israeli banks gained 21% in 2012, after losing 34% in 2011. From August, the banks index gained 44%. Even after the gain, the banks are trading at reasonable multiples, from a historic perspective. Banks analyst Alon Glazer at Leader Capital Markets doesn't counsel cashing out: he thinks it reasonable to assume the Israeli bank shares will gain anywhere from 10% to 30% in 2013, though of course everything depends on the state of the Israeli and global economy. The biggest gainer of the banks pack this year was First International, which gained 57%. It's the bank least exposed to Israel's debt-laden tycoons, by the way. Analyst Meir Slater of DS Apex says Leumi and Hapoalim are vulnerable because of heavy lending to the real estate sector and to the tycoons.

Minister rouses controversy, visits drilling rig: A week after announcing that Delek Group and Noble Energy would get the rights to the Mary B deep-water field of gas (no tender, no contest, no terms of use spelled out) – Energy Minister Uzi Landau flew to visit the drilling rig near the site on Thursday last week together with Delek owner Yitzhak Tshuva. The Movement for Quality Government in Israel has protested the field's award to Delek and Texas-based Noble, saying that it is tantamount to giving public property worth billions to private enterprise, for nothing, and fast-tracking the robbery to boot. The rig that Tshuva and Landau visited will actually be serving Tamar, a giant underwater field of gas discovered next to Mary B.

Teva loses exclusive rights to contraceptive: Famy Care, partner to Mylan Labs, has received the U.S. Food and Drug Administration nod to sell Nordette 28, a contraceptive pill developed by Teva Pharmaceutical Industries subsidiary Barr. With annual sales of $60 million in the last 12 months, losing exclusive rights to Nordette is a mosquito bite for Teva, which reported revenues of $5 billion for the third quarter of 2012 alone. The company predicts that sales by its women's health division will reach $460 million to $500 million in 2013.

Perrigo completes acquisition of Cobrek: The dual-listed drugs company Perrigo on Friday closed the acquisition of Cobrek Pharmaceuticals, an Illinois drug development company, for $45 million cash. Perrigo, which specializes in over the counter drugs, actually co-founded Cobrek in May 2008 together with the company Pentech to develop and market medical foams. Two have been approved and two are in development. In November 2012 Cobrek received FDA permission to sell a generic form of Luxiq foam, originally developed by GlaxoSmithkline; marketing should start in January. In February Cobrek will start selling Olux-E to treat dermatosis of the scalp.

Bezeq union urges solidarity sanctions: The union at phone company Bezeq is urging the company's workers to "stop work and attend informational meetings" in solidarity with their colleagues at subsidiary Pelephone. Sources at Bezeq say they don't expect company operations to be affected much. Pelephone management meanwhile insists that not enough of its employees have joined the union to give it official status to speak on behalf of workers. The union says nearly half of Pelephone's more than 4,000 employees have joined; management says it's only been shown 605 applications.

With reporting by Yoram Gabison, Haim Bior. Avi Bar-Eli, Itai Trilnick and Sivan Aizescu

Too close for comfort? Delek owner Yitzhak Tshuva, left, and Energy Minister Uzi Landau. The government handed over a new gas field to Delek without competition and without specifying the deal.Credit: David Bachar

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