Business in Brief: Shekel Reaches Record High Against the Currency Basket

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Israeli shekels. (illustrative)Credit: Reuters

Shekel reaches record high against the currency basket

The shekel traded today at its highest ever against the official basket of currencies despite the fact that Donald Trump’s election has raised prospects for higher U.S. interest rates. Modi Shafrir, chief financial strategist at Mizrahi Tefahot Bank, said rising U.S. interest rates usually weaken emerging market currencies as investors move the money into dollars. “The shekel is considered a safe haven among emerging-market currencies so in episodes where emerging market currencies weaken against the dollar the shekel strengthens,” he said. The Bank of Israel has been intervening in the forex market, most recently to the tune of $200 million this week when the euro touched a 14-year low, but Shafrir said it might be paring back activity as foreign currency reserves swell above $97 billion. The shekel has also been aided by persistent currency account surprises and foreign investment inflows. The dollar and euro both weakened against the shekel on Wednesday to 3.802 and 4.08705, respectively. (Shelly Appelberg)

Teva follows pharma shares lower on Trump remarks about drug prices

Shares of Teva Pharmaceuticals and U.S. pharmaceutical and biotechnology companies tumbled on Wednesday after President-elect Donald Trump said he would “bring down drug prices.” In a cover article for Time magazine, which named Trump as Person of the Year, he said “I don’t like what has happened with drug prices.” Investors had initially hailed Trump’s victory as a boon for drug and biotech stocks, with the Nasdaq Biotech Index up as much as 12% in the two days after the November 8 election. Investors were relieved that Trump’s rival, Democrat Hillary Clinton, who had been critical of rising drug prices during the campaign, had not won the White House. However, the index is down about 10% from its recent peak and on Wednesday fell to its lowest since Election Day. In Tel Aviv Stock Exchange trading, Teva ended down 1.5% to 131.60 shekels ($34.66) and Mylan dropped 2.9% to 128.70. (Reuters and TheMarker Staff)

NeuroDerm raising $75 million after big share runup this week

Taking advantage of a jump in its share price earlier this week, Rehovot-based NeuroDerm said on Wednesday it was raising $75 million in a follow-on offering of four million shares at $18.75 each. In addition, the company said it had granted the underwriters Jefferies and Cowen & Company a 30-day option to purchase up to an additional 600,000 shares at the offering price. Proceeds from the offering, which is expected to close about December 12, 2016, will be used to fund clinical trials for treatments it is developing for central nervous system diseases, and for research and development. NeuroDerm shot up 38% on Monday after the U.S. Food and Drug Administration said it would allow the company to expedite clinical trials of its Parkinson’s drug candidate NDO-612. On Wednesday, shares of NeuroDerm were down 3.7% to $18.45 mid-day local time in New York. (Yoram Gabison)

Tel Aviv shares surrender early gains

Tel Aviv shares surrendered their gains in late trading on Wednesday to end lower. The TA-25 and TA-100 indices both shed about 0.3% by the end of the session finishing at 1.440.64 and 1,259.23 points, respectively, as 1.47 billion shekels ($390 million) in shares changed hands. While drug stocks were the big losers, El Al Airline extended its losses for a third day down 2.5% at 2.88 shekels, while holding company Kenon dropped 5% to 38.08. Frutarom also ended down 1% to 206.70 despite a Buy recommendation from Citi and a target price of 238 shekels. Mannkind led TA-100 stocks on an 8.8% rise to 2.38 after it said Sanofi had agreed to pay its $10.2 million compensation for backing out of a marketing accord. Ratio added 2.6% to 32 agorot after it increased a $160 million bond issue by $22 million due to favorable market conditions. (Guy Erez)

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