Business in Brief / Mizrahi-Tefahot Q2 Profit Jumps 7.5 Percent

Adama reverse merger lifts IDB group shares; Kite Pharma refutes rumors about death of patient in clinical trial; Tel Aviv shares mixed as market awaits earnings reports

Eliyahu Herkowitz

Mizrahi-Tefahot Q2 profit jumps 7.5%

Mizrahi-Tefahot Bank reported a 7.5% rise in profit in the second quarter yesterday, as financing income topped 1 billion shekels ($260 million) for the first time. Israel’s fourth-largest bank said it earned 330 million shekels, up from 307 million shekels a year earlier and above the 292 million shekels forecast by analysts polled by Reuters. Financing income rose 12.6% to 1.04 billion shekels, while credit loss charges to protect against bad loans nearly doubled, to 40 million shekels. The bank, which holds a 35% share of Israel’s booming mortgage market and is the first of Israel’s largest lenders to report second-quarter earnings, said it would distribute a dividend of 21 agorot a share, the second since it resumed a policy of paying dividends this year. Mizrahi-Tefahot’s Tier 1 capital ratio rose to 9.3% at the end of June, from 8.94% a year earlier. Mizrahi shares finished up 2.8%, at 51.10 shekels. (Reuters)

Adama reverse merger lifts IDB group shares

Shares of the two companies sitting at the apex of the IDB group rallied yesterday on news that the group’s closely held agrochemicals company would finally begin trading publicly via reverse merger that will give it a listing on China’s Shezhen Stock Exchange. As part of the reverse merger with the Chinese company Hubei Sanonda, Adama will pay a $300 million dividend to its two shareholders — China National Chemical Corporation (ChemChina), which has a 60% stake, and IDB’s Discount Investment Corporation, which holds the rest. That $120 million will ease Discount’s heavy debt load, while a Shenzhen listing promises to increase Adama’s market cap. Shares of Discount soared 19.4% to a closing of 9.84 shekels ($2.57) while those of parent company IDB Development Corporation finished 7.1% up, at 2.27 shekels. (Shelly Appelberg) 

Kite Pharma refutes rumors about death of patient in clinical trial

Kite Pharma, the U.S. drug-development company founded and led by Arie Belldegrun, an Israeli, yesterday denied rumors, which had dogged its share price over the past few days, related to the death of a patient who was enrolled in a clinical trial it is conducting of a treatment for a cancer of the blood. “There was one patient death early in the study, which was determined to be unrelated to KTE-C19 by the study investigator,” the company said, referring to its cell therapy for treating lymphoma. “After appropriate discussions with the U.S. Food and Drug Administration, Kite continued to enroll and treat patients in its study and the study was never placed on clinical hold.” It added that in some cases, patients were observed to have experienced a complete disappearance of the tumors. Kite shares tumbled by more than 12% on Thursday and Friday in Nasdaq trading amid the unconfirmed rumors, but yesterday Kite shares were recovering, up 3.7% at $60.14 at late morning local time in New York. (TheMarker)

Tel Aviv shares mixed as market awaits earnings reports

Tel Aviv shares ended mixed yesterday. The benchmark TA-25 index ended down 0.1%, at 1,717.00 points, while the broader TA-100 index cemented its record high closing from a day earlier with a tiny 0.09% gain, to 1,498.75 points. Turnover was 1.31 billion shekels ($340 million). “In light of record highs the local share indexes are now trading at, investors want to get a sense of direction from the earnings reports that have started coming out, which will show us something about profitability,” said Idan Azoulay, investments chief at Epsilon. “But considering the slowdown in economic growth and the strengthen shekel, I think people should have modest expectations.” Energy shares were down as global oil prices fell toward six-year lows yesterday. Avner fell 3.5% to end at 2.97 shekels, Delek Drilling 3.2% to 15.61 and Ratio 2.9% to 38 agorot. Cellphone operators extended their sharp gains, with Partner Communications (Orange) up 7.3% to 18.82 and Cellcom Israel up 6.9% to 26.67. (Shelly Appelberg)