Euro falls to 15-year low against shekel as fears over EU intensify
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The euro fell 0.9 percent on Tuesday to close at a representative rate of 3.9066 shekels, its lowest level since the end of 2001. In after-hours trading into the early evening, the euro eased even more.
The European currency also fell against the dollar as France’s Marine Le Pen did well in another opinion poll, and over expectations of a U.S. interest-rate hike in mid-March. The Elabe poll showed the lead of centrist Emmanuel Macron and conservative rival Francois Fillon over Le Pen falling to 18 and 12 points respectively, suggesting that the anti-EU nationalist may have a greater chance of springing a surprise if she makes it through to the second round of the elections in May.
The dollar’s representative rate against the shekel was unchanged at 3.707 shekels, at weak levels the greenback hasn’t seen in two and a half years. “Over the next several months it’s expected that interest-rate gaps among Israel, the United States and Europe will narrow further, which would halt the shekel’s powerful appreciation and even turn the tables,” said Yaniv Hevron, the chief economist at the Excellence Nessuah Investment. “As a rule, the world looks more inflationary today, other than in Israel, so the Bank of Israel will be able to leave interest rates here low for years.” (Omri Zerachovitz and Reuters)
Drone maker Aeronautics is on the way to billion-shekel IPO in Tel Aviv
Aeronautics, a Yavneh-based drone maker, is heading for an initial public offering that would value the company at about a billion shekels ($270 million). Investment funds including KCPS and Viola Private Equity, which together currently hold a 76 percent stake in the company, intend to offer a 40 percent to 50 percent stake and sell new shares to help finance general operations. The company, which also makes other intelligence systems besides drones, has already held talks with several underwriters for the IPO. Founded in the late 1990s, Aeronautics has sold drones in more than 50 countries. (Eran Azran)
Delek Group receives $1.75 billion loan for its share of Leviathan development costs
The Delek Group said on Tuesday its subsidiaries had sealed $1.75 billion in loan agreements to finance the development of the Leviathan natural gas field off the Mediterranean coast. The loans, to the Delek Group’s Avner Oil Exploration and Delek Drilling, are being provided by a consortium of Israeli and foreign lenders led by HSBC and J.P. Morgan. The Delek Group companies control just over 45 percent of Leviathan. The operating partner for the project, Houston-based Noble Energy, said last week that it would announce its final investment decision sometime during the first quarter. The loans to Delek are the largest financing ever committed to an Israeli business project at the development stage. Meanwhile, the Delek Group wrapped up a 1.1-billion-shekel ($270 million) fundraising through the expansion of a bond series. Delek had initially intended to raise about 500 million shekels, but demand was high, including in the public phase of the bond offering. Delek Group is controlled by billionaire Yitzhak Tshuva. (Eran Azran and Reuters)
Shapir Engineering subsidiary being probed over bribery suspicions in Romania
The state prosecutor’s office is investigating suspicions that Avraham Morgenstern, the former Romania manager at Shapir Engineering and Industry’s Shapir Structures subsidiary, bribed a civil servant. Shapir Engineering, whose shares have traded on the Tel Aviv Stock Exchange since December 2014, ceased operations in Romania earlier that year. In 2015, Shapir said Bucharest was investigating Morgenstern over bribery suspicions; he was later indicted there. The payment of a bribe to a foreign civil servant is a relatively new offense in Israel. It was passed in 2008 after Israel signed agreements sponsored by the United Nations and the Organization for Economic Cooperation and Development aimed at fighting bribery of public officials. (Efrat Neuman)
TASE shares slip but Summit Real Estate and Cellect Biotech surge
The Tel Aviv Stock Exchange eased on Tuesday, weighed down by banking stocks. The benchmark Tel Aviv 35 index dropped 0.29 percent to 1,454.32 points while the broader Tel Aviv 125 eased 0.13 percent to end the day at 1,293.32. Volume was just under 1.5 billion shekels ($404 million). The Banks 5 index declined 0.47 percent to 1,590.25 points, weighed down by First International Bank, which dropped 1.6 percent to 56.51 shekels, and Mizrahi Tefahot, which fell 1.1 percent to 60.35 shekels. Summit Real Estate Holdings bucked the trend and surged 6.8 percent to 22.843 shekels on volume 10 times the daily average over the past month for the stock. Cellect Biotechnology soared 28 percent to 1.33 shekels on a positive earnings report. But Israel Chemicals lost 1.6 percent to 16.35 shekels. SodaStream International slipped 2 percent to 172.80 shekels. See feature story about SodaStream International on page 6. (Shelly Appelberg)