Business in Brief: Stock Market Drama Leaves Israeli Investors With Whiplash

Migdal CEO reassures employees after chairman’s departure ■ Victory supermarket chain owner questioned on price fixing suspicions

File photo: Visitors stand in front of a stock market ticker screen in the lobby of the Tel Aviv Stock Exchange (TASE) on August 4, 2016.
Bloomberg

Stock market drama leaves Israeli investors with whiplash

The Tel Aviv Stock Exchange closed with sharp gains Tuesday after falling steeply earlier in the day and suffering one of its worst days in years on Sunday. The blue-chip TA-35 index gained 2.1% after starting the day down by as much as 2.5%, while the broader TA-125 index gained 1.9%. Bank shares closed up 3.4% after dropping more than 3.5% during trading. Total turnover was 1.6 billion shekels. Notable shares included El Al, up 4.8%; the Israel Corp., up 4%; and Tiv Ta’am, down 5.2%. Capital markets commissioner Anat Guetta sought to reassure investors, noting that long-term, stable investments in the capital market without too much buying and selling pays off over time. “I recommend that everyone behave calmly,” she said at a conference Tuesday. (Eran Azran and Shelly Appelberg)

Migdal CEO reassures employees after chairman’s departure

Migdal Insurance CEO Doron Sapir tried to reassure employees Tuesday, a day after chairman Oded Sarig announced his departure in a sharply worded letter accusing the company and its controlling shareholder, Shlomo Eliahu, of operating based on short-term considerations and without a clear strategy. “It’s important for me to state that Migdal is a strong, stable company with years of experience working for Israel’s insured,” stated Sapir in a letter to the employees. Sarig had said in his letter that he had failed to make strategic changes, stating, “Migdal Insurance operates based on short-term considerations without a defined plan and by sticking to old routines.” After Sarig announced his departure on Monday, Migdal’s share price plummeted by up to 7%. On Tuesday it rebounded by 1.5%. (Assa Sasson)

Victory supermarket chain owner questioned on price fixing suspicions

The owner of Israeli discount grocery chain Victory was questioned by the Antitrust Authority on suspicion of price fixing. Eyal Ravid is suspected of exchanging internal company info with competitors about the pricing, which is considered a violation of the law banning cartels. The trustbuster suspects that Ravid gave an indication of the grocery chain’s plans in an interview with Yedioth Ahronoth’s magazine Mamon, in which he stated, “I won’t let any supplier raise prices, unless [competitors] Super-Sol and Rami Levy agreed before me.” Over the years, Israel’s retailers have developed a system by which they indicate to their competitors that they intend to raise prices via one-sided public statements of intent. Such actions can be considered harmful to competition, and the Antitrust Authority has tried to minimize this phenomenon by strictly enforcing policy. Victory is Israel’s fifth largest grocery chain. Victory and the Antitrust Authority declined to comment. (Hadar Kane)