Business in Brief: Surprise Rate Hike Carries Tel Aviv Shares Higher as Financial Stocks Rise

TheMarker
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FILE PHOTO: An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017.
FILE PHOTO: An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel January 29, 2017. Credit: \ BAZ RATNER/ REUTERS
TheMarker

The Bank of Israel’s surprise rate rise Monday from a low base sent shares on the Tel Aviv Stock Exchange sharply higher as financial stocks climbed. The benchmark TA-35 index finished 1.5% higher at 1,622.23 points while the TA-125 added more than 1.3% to 1,458.90 on turnover of 1.2 billion shekels ($320 million). Bond prices fell, with the Tel-Bond 20 and Tel-Bond 60 indexes both closing about 0.3% lower. Among insurers, Migdal surged 7.8% to 4.15 shekels and Clal 5.1% to 63.90. Menorah Insurance rose 5.6% to 42.04, helped by an 87% rise in third-quarter profit to 193.5 million shekels. Bank Leumi advanced 3,7% to 24.51 and Bank Hapoalim 2.8% to 25.63. Fox added nearly 1% to end at 84.49 after Leumi Capital Markets tagged the stock a Market Overweight and said the share could rise another 22%. (TheMarker Staff)

Matomy shares plummet on bankruptcy worries
The collapse in Matomy shares on the Tel Aviv Stock Exchange Sunday reflects concerns that the digital advertising company faces the threat of bankruptcy. Matomy shares plunged 44% Sunday and another 4.4% Monday to close at 35 agorot (9 cents), while its bonds fell to 52.3 agorot, raising their yield to a junk level of 41%. The selling came after the company said Friday it was in talks to delay an agreement to buy out minority shareholders in its Team Internet unit by November 30 and revise the terms. The company also said it has approached Matomy bondholders about “recent developments and [to] assess the possibility of adopting agreed revisions to the terms of the bond.” Matomy also included a “flash report” of its financial results for the third quarter, which showed earnings before interest, tax, depreciation and amortization of just $2 million on revenues of $103 million. (Shelly Appelberg)

Security company G1 files for initial public offering in Tel Aviv
G1, a security company once known as Hashmira, will be taken public on the Tel Aviv Stock Exchange at a valuation that could reach as much as 550 million shekels ($148 million), according to a draft prospectus filed this week. The Israeli private equity firm FIMI Opportunity Funds will be selling its 50% stake in the company in an offering of shares and warrants in the company. Once part of the global G4S security provider, G1 was sold – reportedly under pressure from the BDS movement – to FIMI last year. G1 provides security services for business and government customers. The company had revenues of 599 million shekels in the first nine months of this year, generating a net profit of 32 million. It has a policy of paying dividends equal to 50% of annual net profit. The initial public offering will be the 15th for FIMI on the TASE. (Yoram Gabison)

Co-Op supermarket chain files for stay of proceedings
The Co-Op Israel Cooperative Society and Co-Op Shop supermarkets chain filed in Jerusalem District Court for a 90-day stay of proceedings against its creditors Monday. The chain, which is owned by its 13,000 members, said its assets of about 250 million shekels ($67.3 million) exceeded its debts by about 50 million but it was experiencing short-term cash-flow problems in part due to one-time expenses. Nationwide the society operates 42 stores directly and 30 through franchisees, but industry sources say they doubt Co-Op’s problems would affect competition. “They haven’t been real competitors for years,” one industry executive said. “On the contrary, they hurt competition by buying [from suppliers] at any prices and preventing prices from falling.” Judge Alexander Ron scheduled a hearing on the petition for Wednesday. Union leaders at Co-Op declared a labor dispute, which could lead to a strike in two weeks. (Efrat Neuman, Hadar Kane and Gabriela Davidovich-Weisberg)

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