Business in Brief: Bank of Israel Increases Stake That Institutional Investors Can Hold in Banks

Shikun & Binui shares plunge over jitters on the Nigerian currency market; Kamada gets FDA approval to expand patient use of its flagship emphysema drug; TASE shares decline; Africa-Israel shares up on report that Leviev has struck debt deal.

The Bank of Israel headquarters in Jerusalem.
Reuters

Shikun & Binui shares plunge over jitters on the Nigerian currency market

Shares of Shikun & Binui dropped 13.3% on Thursday in Tel Aviv  to 6.18 shekels ($1.60) over concern that the company’s credit rating would be lowered following currency instability in Nigeria, where it does business. The Nigerian central bank announced on Wednesday that it is decoupling the value of the country’s currency, the naira, from that of the U.S. dollar. The bank had previously pegged the naira at 197 to the U.S. dollar but the currency trades at about half that on the black market as a slump in oil revenues has hammered public finances and foreign currency reserves. The new trading rules begin on Monday, and if Shikun & Binui has contracts that are not linked to a stable foreign currency, it might suffer losses. The company also has 177 million shekels ($45.7 million) in the Nigerian currency on hand and 6 billion shekels in back orders in Nigeria, for which it is due to be paid in Nigerian naira. (Shelly Appelberg and Reuters)

Bank of Israel increases stake that institutional investors can hold in banks

The Bank of Israel is raising the upper maximum stake that controlling shareholders’ in the country’s banks can have in other institutions which manage clients’ funds (such as provident funds, insurance companies, mutual funds, and exchange traded notes). The current limit of 5 percent. From now on controlling shareholders in such institutions will be allowed to hold up to 7.5 percent of the shares of a banking corporation, subject to receiving a permit from the Governor of the Bank of Israel. “Many institutional investors who approached the Banking Supervision Department emphasized that as of today, the holding limit of 5 percent prevents them from increasing their holdings of bank shares on behalf of the public. This also adversely impacts the negotiability of banks’ shares, and indirectly [impacts] banks’ market values,” the Bank of Israel explained in a statement Thursday. (TheMarker)

Kamada gets FDA approval to expand patient use of its flagship emphysema drug

Kamada, the Nes Tziona drug company that develops plasma-based medications for rare diseases, has received approval from the U.S. Food and Drug Administration to expand use of its flagship emphysema drug Glassia so that now patients will be allowed to inject it themselves. The drug is prescribed for patients with a hereditary form of the lung disease caused by a lack of a specific protein, alpha-1 antitrypsin. The company, which markets the drug through Shire pharmaceuticals’ Baxalta division, said there are an estimated 100,000 patients suffering from the condition in the United States alone. Kamada is projecting total revenues for 2016 of between $75 and $80 million. Kamada closed up 0.2%  to 14.79 shekels ($3.82) on Thursday on the Tel Aviv Stock Exchange. (Yoram Gabison)

TASE shares decline; Africa-Israel shares up on report that Leviev has struck debt deal

The benchmark Tel Aviv 25 index closed down 0.82% to 1,408.68 points on Thursday while losses on the broader Tel Aviv-100 index fell 1.05% to 1,222.02. Trading volume was 1.88 billion shekels ($486 million). With the news that Nigeria would delink its currency from the American greenback, shares of Shikun & Binui, which has business interests in the West African country, plunged 13.3%. (See separate story above). In other company news, Africa-Israel Investments stock surged by 10% to 1.00 shekel ($3.87) on reports that controlling shareholder Lev Leviev had come to an agreement with a Russian bank regarding $614 million in loans owed the bank. There was also news that Teva Pharmaceutical Industries has agreed to sell five of its product portfolios awaiting approval from the U.S. Food and Drug Administration to Illinois-based Sagent Pharmaceuticals for $40 million. The products were sold to meet the terms set by American antitrust authorities in connection with its acquisition of Allergan’s Actavis generics business. (TheMarker)