Business in Brief: Bank of Israel Seen Intervening More in Forex Market

Allot chairman on his way out; stock exchange privatization long overdue; China’s Sanonda buying Adama; Wall Street losses send Tel Aviv shares lower.

One-hundred-dollar bills
Reuters

The Bank of Israel is likely to become more assertive in intervening in the local forex market, despite declarations to the contrary, Vered Yitzhaki, forex chief at Excellence Investment House, said Tuesday. She said the central bank was likely to act every time the dollar sank to between 3.72 and 3.74 shekels. “The Bank of Israel, when it bought dollars last week, wanted to signal to the market that ‘I’m here,’” she said. “I believe that the Bank of Israel will try to be more aggressive about weakening the shekel.” The central bank intervened last Tuesday for the first time in a long time when the dollar reached 3.743. It has since recovered and on Tuesday was fixed at 3.772. Yitzhaki said that between an expected U.S. interest-rate hike and the U.S. presidential election, the dollar should strengthen to 3.86 or even more. (Guy Erez)

Allot chairman on way out after vote on extending term withdrawn
Allot Communications Chairman Shraga Katz appeared to be on his way out Tuesday after the maker of gear for optimizing communications networks withdrew a proposal extending his term by three years before a shareholders’ vote on it was completed. The move came amid opposition from minority shareholders and the investor advisory service Entropy to the extension and to other proposals granting Katz and CEO Andrei Elefant stock options. The vote was scheduled to be completed by the end of Tuesday, and the decision by the board to withdraw the proposals at the last minute suggests that the voting was going against it. But by pulling the motion, Katz will have no choice but to step down. Entropy opposed the measure on the grounds that it would complicate any attempt at a hostile takeover of the company by making it hard for new owners to replace the board. Shares of Allot, which has been the subject of takeover speculation in recent weeks, fell 1.2% to 19.59 shekels ($5.18). (Omri Zerachovitz)

Report: Tel Aviv Stock Exchange privatization is long overdue
The Tel Aviv Stock Exchange should have been privatized a decade ago when Israel reached the stage of economic and market development that required a more sophisticated bourse, a study by the Israel Securities Authority released Tuesday showed. The report's conclusion is based on an analysis of other privatized stock exchanges around the world. It found that privatized exchanges reduced trading costs and were faster to adopt new technology because shareholders would hold management to higher standards than the mutual-ownership system the nonprofit TASE operates under. The Knesset is now considering a law that would let the TASE be turned into a for-profit corporation, but its terms have met opposition. Answering critics, the report said a for-profit TASE was unlikely to encourage inappropriate companies to list because that would undermine its reputation. (Uri Tomer)

China’s Sanonda to buy Israel’s Adama for $2.8 billion
China’s Hubei Sanonda said Tuesday it would acquire Israel’s Adama Agricultural Solutions for about 18.6 billion yuan ($2.79 billion). Based in China’s Hubei province, Sanonda also said it aimed to raise up to 2.5 billion yuan in a private placement of shares to help finance production and expansion projects at Adama, the world’s biggest maker of generic agrochemcials. “The listed company aims to boost synergy and enhance overall profitability through a merger with Adama,” Sanonda said in a filing to the Shenzhen Stock Exchange. Earlier this year, Israel’s Discount Investment Corporation agreed to sell its remaining 40% stake in Adama to Sanonda’s parent China National Chemical Corp (ChemChina) for $1.4 billion, including debt. ChemChina had owned 60% of Adama before the deal. The deal paved the way for a merger between Adama, the world’s biggest producer of generic crop protection products, and smaller agrochemical producer Sanonda. (Reuters)

Wall Street losses stun Tel Aviv shares
Tel Aviv shares treaded water most of the day Tuesday until a lower opening on Wall Street sank them. The blue-chip TA-25 index ended down 0.45% at 1,430.72 points, while the TA-100 lost 0.3% to 1,254.20, on turnover of 1.27 billion shekels ($340 million). Bank shares were especially hit, with First international Bank of Israel falling 2.8% to 47.15 shekels, Bank Leumi losing 1.9% to 14.20 and Bank Hapoalim 1.65% to 20.82. But volume leader Teva Pharmaceutical Industries surged 2.5% to 194.40 shekels after Oppenheimer rated the stock a Market Outperform and set a target price for its U.S.-traded shares of $66. In New York, the stock was trading late morning local time at $51.10. Other top gainers were El Al Airlines, up 2.2% at 3.47, Opko Health, up 1.75% at 37.19, and Bezeq, up 1.1% at 7.30. Cellect finished 1.6% higher at 89 agorot after it said the Health Ministry had approved the conducting of a Phase I/II trial of its cell selection technology in leukemia patients. (Omri Zerachovitz)