Business in Brief: Dollar Loses Ground to Shekel as Shares Gain

Ability shares rally on expectation of big sales contracts | Teva may take $258 million write down | Israelis among those detained in Romanian trading crackdown

Mixed denomination Shekel currency banknotes and coins sit on display in this arranged photograph at Israel's central bank in Jerusalem, Israel, on Monday, Aug. 19, 2013.
Ariel Jerozolimski, Bloomberg

Dollar loses ground to shekel as shares gain

The dollar weakened sharply against the shekel as Tel Aviv shares edged higher on Monday. The U.S. currency lost more than 1% to a Bank of Israel rate of 3.8310 and was down to 3.8228 in late trading amid speculation that the U.S. Federal Reserve will delay on a long anticipated interest rate hike after a disappointing jobs report last week. The dollar stabilized in global markets on Monday after dropping 1.5% against the euro on Friday to its lowest since May 12 and its second biggest single-day decline so far in 2016. In stock trading, the Tel Aviv Stock Exchange’s TA-25 index fell 0.15% to close at 1,445.99 points while the TA-100 lost 0.1% to 1,257.59. Turnover was a relatively brisk 1.32 billion shekels ($350 million). Among gainers, Bezeq advanced 1.8% to 7.59 shekels and Frutarom rose 1.6% to close at 188. Biotech shares dominated the list of decliners, paced by a 3.4% drop in Navidea to 2.95 and a 3.1% drop in Opko Health to 37.48. (Ruti Levy)

Ability shares rally on expectation of big sales contracts

Shares of Ability, which plunged after it warned a month ago it would be restating earnings going back to 2012, took a sharp turn higher after it said on Monday it was about to close on major contracts for its cyber intelligence tools it makes for security and intelligence agencies. “We expect to close two additional sales, priced at approximately $10 million each, and have two more in earlier stages of discussion with potential customers,” said CEO Anatoly Hurgin about the company’s new Unlimited Interception System, which can spy on a smartphone user just by gaining access to the phone number. Meantime, Ability attributed a 68% year-on-year drop in first-quarter sales to $6.5 million to the timing of orders for big projects. It posted a loss of $242,000, turning around from a net profit of $6.1 million a year ago in part due to a one-time tax assessment of $1 million. Ability shares jumped 11.1% to finish at 13.14 shekels ($3.44). (Omri Zerachovitz)

Teva may take $258 million write down

Teva Pharmaceuticals looked increasingly likely to be writing down $258 million against the declining value of its 14.6% stake in the Australian biotechnology company Mesoblast. Mesoblast on Friday asked Nasdaq to suspending trading its shares due to “material corporate developments with respect to certain assets of the company,” which it said it would explain within the week. The Australian Business review quoted unnamed market sources as saying that Teva had decided to exercise an option it has by the end of June to end funding to develop Revascor, Mesoblast’s treatment for chronic heart failure. Teva acquired the Mesoblast stake as part of its ill-fated acquisition of Cephalion in 2011 for $6.7 billion. In its first-quarter report, Teva said it might take a $258 million charge in the current quarter against Revascor. Teva shares closed up 0.5% at 209.40 shekels ($54.80). (Yoram Gabison)

Israelis among those detained in Romanian trading crackdown 

Twelve Israelis were among 130 people arrested by Romanian authorities some two weeks ago for offering binary forex and options trading services without a license. The mass arrests came after Romanian police were alerted by clients who said they deposited funds with the brokerages only to discover they could not get their money back, according to the website Finance Magnates, which first reported the news. The brokerages, which target Romanian and foreign investors, use high pressure sales tactics and promises of big returns to solicit investors to deposit large sums of money. Many of these businesses are owned directly or indirectly by Israelis and presented themselves to investors as being based Britain or Cyprus. Ariel Merom, who was once employed by one of the brokerages, warned the Knesset Finance Committee and the Bank of Israel two years ago about the danger but nothing was done to curb it and hundreds of Israeli firms still operate. (Shelly Appelberg