Business in Brief: Nehama Group Changes Mind and Agrees to Buy JEC

Mizrahi tops forecasts for quarterly profit; Tel Aviv shares finish day mostly higher.

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Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014.
Stock prices flash on an electronic screen displaying world clocks at the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Dec. 11, 2014. Credit: Bloomberg

Nehama group changes mind and agrees to buy JEC

An investor group led by Shlomo Nehama, the former chairman of Bank Hapoalim, is buying control of the struggling property company Jerusalem Economy Corporation after all. Earlier this week he pulled out of the deal to buy Eliezer Fishman’s controlling stake in the company via Bank Leumi, which holds them as collateral against unpaid debt. But Thursday, the bank said Nehama signed an agreement. In the meantime, however, JEC went ahead with a 500 million-shekel ($127.9 million) share offering that will dilute the stake to 15% of the company from 28%.  Thus, the Nehama group will buy 150 million shekels in shares in the offering to bring its stake up to 25%, giving him effective control over JEC. Nehama will pay the bank the equivalent of 15% of JEC’s shareholders’ equity within five years, a figure that could reach into the hundreds of millions of shekels. JEC shares closed up 1.1% at 4.45 shekels. (Michael Rochvarger)

Mizrahi tops forecasts for quarterly profit
Israel’s top mortgage lender, Mizrahi Tefahot Bank, reported a higher quarterly net profit due to a lower credit loss provision but missed analysts’ expectations as interest income fell. Mizrahi Tefahot, Israel’s fourth-largest bank, said on Thursday it earned 240 million shekels ($61 million) in the fourth quarter, up from 203 million a year earlier but below 280 million shekels forecast in a Reuters poll of analysts. Its provision for credit losses fell to 75 million shekels from 150 million in the final quarter of 2014, while net interest income declined to 820 million from 846 million. Mizrahi Tefahot, which holds a 35 percent market share in mortgage lending, said it will distribute a dividend for the quarter of 36 million shekels, bringing its payout for 2015 to 122 million. The bank’s Tier I capital ratio, a key measure of its financial strength, rose to 9.5% at the end of 2015 from 9.05 percent at the end of 2014. Mizrahi shares ended down 0.9% to 43.06 shekels. (Reuters)

Tel Aviv shares finish day mostly higher

Tel Aviv shares ended Thursday mostly higher, although small caps and insurance stocks stood on the sidelines. The benchmark TA-25 index finished the session up 0.45% at 1,427.09 points, while the TA-100 gained 0.4% to 1,230.09, as 1.64 billion shekels ($420 million) in shares changed hands. Among blue chips, Bank Hapoalim finished up 1.9% at 19.05 shekels and Bezeq rose 2% to 8.82. But Israel Chemicals finished the day 1.5% lower at 14.82 and Bank Leumi, the volume leader, lost 0.65% to 13.16.  Ituran, which fell after it announced Wednesday it was delisting its shares from the Tel Aviv Stock Exchange, climbed on Thursday 2.7% to 69 shekels. Biomed shares outpaced the market, led by Mannkind’s 5.5% gain to 4.22. Navidea rose 3.5% to 3.91 and Opko Health 3% to 4.83. Chip maker TowerJazz advanced 1.65% to 52.45 a day after reporting better-than-expected earnings.  In the fixed-income market, the government’s 10-year shekel bond ended unchanged. Its inflation-linked bonds for the same term rose 0.3%. (Uri Tomer)