Business in Brief: Demand for JEC Share Offering Strong as Nehama Signs Deal to Buy Control

Badash to step down as head of Israel’s biggest investment house; First Int’l Bank doubles fourth-quarter profit.

Pedestrians pass the entrance to the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014.
Bloomberg

Demand for JEC share offering strong as Nehama signs deal to buy control

Jerusalem Economy Corporation, the beleaguered property company, raised 487 million shekels ($124.5 million) in the institutional tranche of a share offering on Thursday and was due to top it off with at least another 120 million in the public tranche yesterday. Investors piled into the offering, with orders reaching 866 million shekels and the final price set at 4.70 shekels, unusually a 7% premium of JEC’s closing price on Thursday. The offering’s success was due to news that an investor group led by Shlomo Nehama the same day signed an agreement with Bank Leumi to buy a controlling stake in JEC the bank holds as collateral for unpaid debt owed it by Eliezer Fishman. Until the news emerged late in the day, demand for the shares had been tepid. The share offering is diluting Nehama’s stake, but he is expected to buy up to 150 million shares in the public tranche to bring his stake to 30%. JEC shares jumped 27.4% to end at 5.49 shekels (Michael Rochvarger)

Badash to step down as head of Israel’s biggest investment house

In a surprise move, Hagai Badash said yesterday he is stepping down as CEO of Psagot, Israel’s biggest investment house with some 190 billion shekels ($49 billion) of assets under management. Badash, who took over the top job four years ago, is likely to stay on until the end of 2016 while Psagot’s controlling shareholder, the British buyout fund Apax Partners, finds a successor. Among four rumored candidates, two are from inside Psagot – Tal Kedem, head of sales, and Nir Moroz, chief of investments.  Under Badash’s leadership, Psagot has grown quickly both in terms of assets under management and profitability despite volatile markets and a challenging regulatory environment. Psagot’s earnings before interest, taxes, depreciation and amortization grew 50% from his first year in 2012 to a record 390 million shekels in 2015.  Badash is expected to do the same thing as his predecessor in the job, Roy Vermos, and set up a hedge fund. (Assa Sasson)

First Int’l Bank doubles fourth-quarter profit

First International Bank of Israel, the country’s fifth-largest bank, reported yesterday it had doubled its fourth-quarter profit, mainly because its year-earlier earnings had been weighed down by one-off regulatory and accounting items imposed on the bank. FIBI posted a fourth-quarter net profit of 117 million shekels ($30 million), compared with 51 million a year earlier and 105 million forecast by analysts in a Reuters poll. But net interest income edged up to 499 million shekels from 498 million. FIBI’s Tier 1 capital ratio under Basel III rose to 9.81% from 9.69% at the end of 2014. Michael Goldberg, banking analyst at Excellence, termed the bank “relatively weak.” Without recoveries from earlier bad-loan set-asides and an unusually low tax bite, net would have been 9,.5 million shekels, equal to a 5.5% return on equity, he estimated.  FIBI shares ended up 2.2% at 44.38 shekels. (Michael Rochvarger)

Tel Aviv shares end higher, despite Biomed index blooper

Tel Aviv shares ended higher yesterday, although biomed stocks briefly went into an accidental decline due to a typo. The mistake, which was made as the index was recalculated to account for a reverse split in BioLight shares, suddenly gave the tiny biotech company an 11% weighing in the index while its share price was tanking. For the day, the TA-25 and TA-100 indices both ended up close to 1% at 1,441.03 and 1,242.27 points, respectively, on turnover of just 481 million shekels ($122.9 million). Among top gainers, LivePerson rose 8.9% to close at 19.90 shekels and SodaStream added 5.6% to 58.99. Ormat Technologies was unusually the most active share of the day, rising 0.9% to 149.30. Mannkind shares dropped 7% to finish at 3.393 after the biotech company’s founder, Alfred Mann, passed away over the weekend. In the fixed-income market, the government’s 10-year shekel bond lost 0.23% to raise its yields to 1.79%. Its 10-year inflation-linked bond fell 0.29% to a yield of 0.30%. (Omri Zerachovitz)