Business in Brief / Israeli Institutions Hold Islamic Bonds

Utility sells bonds without gov't backing; Euro posts big gain on the shekel; Verint shares off on revenue miss; Tel Aviv ends lower as world markets decline.

Bloomberg

Israeli institutions hold Islamic bonds

Israeli institutional investors hold shares in securities listed on Arab stock exchanges, including Islamic sukuk bonds, according to the website Stocker.co.il, which tracks assets held by Israeli pension funds and other institutions. Among the biggest holdings is Saudi Electricity Global Sukuk Company, a unit of the Saudi Electric Company that issues Islamic bonds. Israelis hold 14.7 million shekels ($3.8 million) of the debt. Israeli institutions hold an additional 3 million shekels in sukuk bonds in the United Arab Emirates bank Emirates NBD. More are held in the Islamic Development Bank, a multistate institution that includes Saudi Arabia and Libya as shareholders. Israeli institutions hold 1.2 million shekels of bonds in the National Bank of Abu Dhabi and an unspecified amount in Malaysia’s Wakala Global Sukuk. The website doesn’t name the Israeli institutions, but TheMarker has learned that they include Harel PIA. (Dror Reich)

Utility sells bonds without gov’t backing 

The state-owned Israel Electric Corporation yesterday raised over 900 million shekels ($234.6 million) in an institutional presale of bonds, its first in 13 years done without government backing. The issue drew orders worth 1.8 billion shekels for two series of bonds — 466 million shekels of 3.32% bonds with maturities of 5.9 years and 438 million of inflation inflation-indexed bonds with a coupon of 2.96% for 10 years. CEO Itzhak Balmas noted that the company was going through a challenging period as it fires hundreds of workers under pressure from the government and a massive debt load of some 70 billion shekels.  (Eran Azran)

Euro posts big gain on the shekel

The euro rose sharply against the shekel yesterday as the dollar sank amid signs of an improving outlook for growth, and inflation in the euro zone helped increase government-bond yields in Europe. The European currency strengthened more than 1.3% to a Bank of Israel rate of 4.3560, although it weakened to 3.3246 in late trading. The euro, which has rallied against most major currencies in recent days, has added 3.3% to its value since May 27. The dollar, by contrast, dropped 0.72% to a Bank of Israel rate of 3.8360, capping a 1.2% depreciation over the past five trading sessions. Currency trader FXCM said the dollar could fall to 3.80 shekels but could get support from Friday’s U.S. jobs report, which would signal rising interest rates ahead. (TheMarker)

Verint shares off on revenue miss

Shares of Verint Systems, the Israeli-U.S. maker of business software, fell yesterday after it failed to meet Wall Street’s expectations for first-quarter revenue. The company reported revenue of $270.4 million for the quarter, up just 0.4% from a year ago and below estimates polled by Thomson Reuters of $274.39 million. The company said earnings reached 66 cents a share, on a non-GAAP basis not counting special items, above analysts’ estimates of 54 cents a share. CEO Dan Bodner said he expected a better performance later in the year. “Following typical Q1seasonality, we expect strong sequential revenue growth in Q2 and are targeting double-digit revenue growth for the year on a constant currency basis,” he said. Verint shares were down 3.9% at $63.78 in New York trading late morning local time. (TheMarker)

Tel Aviv ends lower as world markets decline

Tel Aviv shares ended lower Thursday as rising bond yields weighed on global stock markets. The benchmark TA-25 index lost 0.5% to end at 1,696.74 points, while the TA-100 shed 0.3% to 1,468.09. Turnover was 1.63 billion shekels ($420 million). Israeli bond prices continued their decline but recovered from their steepest losses of the day, with the government’s 10-year Shahar bond down 0.26% to leave its yield at 2.9%. Telecom shares posted the biggest declines in the stock market, but Partner Communications — at the center of a storm after the CEO of France’s Orange said he wanted to break commercial ties — suffered a restrained drop of just 1.1% to end at 9.23 shekels. Bezeq was the big loser in the sector, falling 3.1% to 6.64. (Dror Reich)