Business in Brief

Analyst: Market to rise, shekel and credit rating to fall; Election news has little effect on TASE; Leumi nixes Tnuva loan to Chinese firm.

At the entrance to the Tel Aviv Stock Exchange, 2011.
Bloomberg

Analyst: Market to rise, shekel and credit rating to fall

“Past experience indicates that generally half a year after elections, Israel’s stock market is at a higher point than it was before elections,” said Alex Zabazinski, head economist at Meitav DS, on Tuesday. “The current uncertainty is likely to further push down the shekel against other foreign currencies and make imported products more expensive, boosting inflation. The rating agencies are unlikely to lower Israel’s credit rating before the new government is formed and states its intent regarding the budget deficit,” said Zabazinski. Uri Greenfeld, chief economist and strategist at Psagot, said the main effect of elections on Israel’s economy would involve inflation. “Government reforms to reduce the cost of living are likely to stall, which may create some inflationary pressure,” he said. (Omri Zerachovitz)

Election news has little effect on TASE

The Tel Aviv Stock Exchange closed nearly unchanged Tuesday amid the news that the country would likely be heading to elections, after trading with losses for most of the day. The dollar gained 1.1% against the shekel to close at a representative rate of 3.958 shekels, nearly hitting the 4-shekel mark. The blue-chip Tel Aviv-25 Index closed nearly unchanged at 1,474 points, while the broader Tel Aviv-100 Index closed at 1,307 points, also nearly unchanged. The Banks-5 lost 0.8%, while real estate shares gained 0.4%. Total turnover was 1.2 billion shekels, close to the average as of late. Oil and gas shares, which are down 4.5% for the past two days, dropped 0.6% on Tuesday after oil prices increased the previous evening. Shares in Leviathan gas field partners Avner Oil Exploration, Ratio Oil Exploration and Delek Drilling lost 1.5%, 4.4% and 1.5% respectively. (Omri Zerachovitz)

Leumi nixes Tnuva loan to Chinese firm

Bank Leumi won’t be giving Chinese food giant Brightfood a loan to buy the controlling share in Israeli food manufacturer Tnuva. Brightfood is buying Tnuva at a valuation of 8.5 billion shekels from controlling shareholder Apax Fund. Minority shareholder Mivtach Shamir may sell its Tnuva shares as well. Leumi was the lever of a consortium of banks that granted Apax the necessary funds to buy Tnuva in 2008. That 2-billion-shekel loan reaped hundreds of millions of shekels for the banks. This time, Tnuva will be changing hands with financing from Leumi competitor Bank Hapoalim, which will be loaning the Chinese conglomerate 1.5 billion to 2 billion shekels. (Michael Rochvarger)