Analysts Mostly Bullish on Israel Chemicals post-Sheshinski

Business in Brief: Moody’s unexpectedly cuts outlook for top Israeli banks; Excellence Nessuah staff mount labor action; Bondholders representative warns Israel Post still financial shaky; Tel Aviv shares advance; dollar retreats

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A conveyor belt deposits white potash into storage piles at ICL Fertilizer's Dead Sea Works, part of Israel Chemicals Group, on the Dead Sea.
A conveyor belt deposits white potash into storage piles at ICL Fertilizer's Dead Sea Works, part of Israel Chemicals Group, on the Dead Sea.Credit: Bloomberg

A day after the government’s Sheshinski committee released its revised recommendations for taxing natural resource companies, equity analysts remained positive on Israel Chemicals, the company most affected by the proposals. Most analysts raised or retained their recommendations on the shares, saying that its price had already been discounted for the impact of Sheshinski. Citing some softening of the committee’s tax policy that will save ICL some 100 million shekels ($26.8 million) in annual taxes, Michal Alshech, analyst at Leader Capital Markets raised her target price for ICL stock by a shekel to 31 shekels and raised her rating on the stock for Market Outperform to Buy. Gil Bashan of IBI Israel Brokerage & Investments gave ICL a target price of 33 shekels and raised his rating to Buy from Neutral. Gilad Alper, of Excellence Brokerage, was less bullish, saying the revised proposals were disappointing. “All told, ICL’s situation is relatively worse than it would have been without Sheshinski. ICL will be a very different company five years from now. It will likely reexamine its capital investments in Israel and probably cancel much of them and instead invest overseas.” (Eran Azran)

Moody’s unexpectedly cuts outlook for top Israeli banks

In a surprise move, Moody’s Investors Service late on Monday lowered the outlook on the deposit ratings for three of Israel’s five biggest banks, citing prosed changes in how the Bank of Israel would bail out troubled lenders in the event of a crisis. Moody’s changed the outlook for Bank Hapoalim, Bank Leumi and First International Bank of Israel to Negative from Stable, although it retained the rating themselves – A2/prime-1 for Hapoalim and Leumi and A3/prime-2 for FIBI. Moody’s said the Bank of Israel’s proposed changes would put more of the burden for rescuing a failed bank on the bank’s creditors rather than on government aid. “Authorities are increasingly employing market solutions in the provision of support to troubled banks in order to protect public finances,” Moody’s noted. Moody’s ratings for Israel Discount Bank and Mizrahi Tefahot Bank already carry Negative outlooks. (Sivan Aizescu)

Excellence Nessuah staff mount labor action

Employees of Excellence Nessuah – Israel’s first and only unionized investment house – have begun a labor action to protest what they claim is foot-dragging in talks over a collective wage agreement. The workers committee has already declared a formal labor dispute, but to kick off the actions, close to 100 of Excellence’s 580 employees were invited to an informational meeting on the 16th floor of the company’s headquarters. Avi Jana, chairman of the workers committee, said the union is seeking to have a say in all decisions regarding promotions and other personnel issues. “We want to participate, but that doesn’t mean we’ll become trouble-makers that block every attempt to everything that helps the company,” he said. Management said talks were underway and making progress. Many employees are concerned about layoffs when Phoenix Insurance, which owns 90% of Excellence, is sold. (Haim Bior)

Bondholders representative warns Israel Post still financial shaky

Israel Post’s bondholders are doubtful that the rescue plan for the state-owned company agreed to two weeks ago lifts the danger of default. “Unfortunately the agreement in principle that was reached doesn’t provide any way for the company to meet its obligations to bondholders,” Eyal Gabbai, a court-appointed observer for Israel Post, said in a report released on Tuesday. “The company is continuing its march into the abyss of insolvency.” In particular he faulted the rescue plan for failing to alleviate the requirement that Israel Post provide universal service, which means it needs to operate 500 to 700 post offices despite the enormous financial cost. With this year’s losses expected to reach 185 million shekels ($49.6 million), Israel Post could run out of cash in 18 months and be unable to pay salaries or interest to bondholders. (Amitai Ziv)

Tel Aviv shares advance; dollar retreats

After getting off to a weak start, Tel Aviv shares extended their gains on Tuesday. The TA-25 index of blue chips finished up 0.6% at 1,443.19 points while the TA-100 added 0.5% to 1,287.04, on turnover of 1.25 billion shekels ($340 million). Israel Chemicals marked a second day of gains after the Sheshinski report’s release, adding 0.4% to 26.10 shekels. Perion Network led the TA-100 with a 5.3% advance to 21.97 and Housing & Construction Limited rose 3.2% to 9.20. Mazor Robotics skidded 2.2% to 20.90 shekels after Oracle Partners, a major shareholder, offloaded a big block of shares this week. The dollar pulled back after reaching a two-year high on Monday, weakening 0.4% to a Bank of Israel rate of 3.7310 shekels. (Dror Reich)

MyHeritage to collaborate on ancestry reporting

The personal genetics company 23andMe and Israel’s MyHeritage said Tuesday they would collaborate to enable people to discover their heritage based on genetic ancestry and documented family history. California-based 23andMe, which is backed by Google, is a pioneer in the sale of home genetic tests and has more than 750,000 clients. It sells a $99 DNA test, from which it provides its customers ancestry-related genetic reports. (Reuters)

Hotdog recall

Soglowek, the maker of prepared meats, said Tuesday it was recalling packaged hotdogs that may contain pieces of a rubber gasket that broke off from production machinery during manufacturing. The company said the recall was for 400-gram versions of its chicken dogs with a use-by date of February 1 2015. Shoppers who bought the product, whose barcode is 7290006739346, should call 1-800-555-000 to get a voucher for a replacement package. (TheMarker)

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