Business in Brief: Tel Aviv Shares Quietly Mark End of Stormy Year

Teva said to be in talks to sell Oncotest diagnostics unit ■ Africa Israel bailout collapses as Moti Ben-Moshe asks for deposit back

File photo: Employees take a break outside the entrance to the Tel Aviv Stock Exchange in Tel Aviv, Israel, August 4, 2016.
Bloomberg

Tel Aviv shares quietly mark the end of a stormy year

A nail-biting 2018 ended quietly for the Tel Aviv Stock Exchange on Monday, with share trading mixed. The benchmark TA-35 index edged down 0.03% to a close of 1,463.87 points, while the TA-125 climbed 0.1% to 1,333.18, on turnover of 1.23 billion shekels ($330 million). That left the TA-35 index down 3% for the year. As for 2019, analysts remain bullish despite a miserable year for world markets. “Everyone who expects a global recession in the near future should consider reducing exposure to shares. Those who do not expect one and expect the economy to eventually overcome psychological fears and that the good data on the economy and the companies will regain control of the markets should maintain their exposure,” said Harel in a market commentary. Bank Leumi fell 0.5% to 22.60 despite welcome news that the Bank of Israel had cleared the way for Warburg Pincus to buy Leumi’s credit card unit. (Shelly Appelberg)

Africa Israel bailout collapses as Moti Ben-Moshe asks for deposit back

The Africa Israel Investments bailout deal was on the rocks late on Sunday after buyer Moti Ben-Moshe said negotiations with bondholders appeared to be over and asked to get back his 90 million shekel ($24.1 million) deposit. “It seems that your company (the bondholders representative) has chosen to end the mediation process between the parties, even if it did not give notice as would have been expected,” said attorneys for Ben-Moshe’s holding company Extra said in a letter to bondholders, but held out the prospect of renewing talks. “Extra still believes that the parties should use the framework of the short mediation process in order to try to reach understandings.” Ben-Moshe is supposed to cover 2.3 billion shekels of the 3 billion the company owes bondholders. However, until now Ben-Moshe has only raised 280 million of the 1.5 billion shekels he needs to initially pay them. Africa Israel shares ended up 5% at 13 agorot. (Eran Azran and Shelly Appelberg)

Israeli Aharon Frenkel – not Brazil’s Embraer – now biggest shareholder in Aeronautics

Israeli investor Aharon Fogel – and not the Brazilian aerospace company Embraer, as originally thought – is now the biggest shareholder in the troubled Israeli drone maker Aeronautics. Frankel, an investor in real estate and civilian aerospace businesses, acquired 13% of Aeronautics on Sunday – 5.5% from the insurer Phoenix at a 25% premium and the rest on the Tel Aviv Stock Exchange at the market price. Frankel made the purchases through a company called ERJ 145 NUA, whose first three letters are the New York Stock Exchange ticker for Embraer, causing initial confusion about the buyer’s identity. Frankel is believed to have taken advantage of the collapse of Aeronautics’ share price to take a positon in the company cheaply and has no intention of seeking a seat on the board, but he is regarded as a long-term investor. On Monday, Israel Securities Authority investigators again raided the company’s offices. Aeronautics shares ended up 4.1% at 8.90 shekels ($2.38). (Guy Erez)

Teva said to be in talks to sell all or part of Oncotest diagnostics unit

Teva Pharmaceuticals is reportedly looking to sell or bring in a joint venture partner for its Oncotest-Teva unit, which provides personalized medicine to Israeli patients. Teva declined to comment on what it called “market rumors,” but sources said the company was in talks with four groups about a deal. The sale of all or part of Oncotest isn’t part the massive cost-cutting drive Teva is undertaking to reduce its debt but it an attempt to realize the unit’s growth potential by linking it with a major global provider of diagnostic products or medical electronics. Oncotest products are used to diagnose malignant diseases and predict disease progression based on the unique genetic profile of the patient and the tumor cells. Its flagship products, marketed under the Oncotype DX name, are used to diagnose and improve treatment options for prostate, breast and colon cancers. Teva shares finished down 0.6% at 58.65 shekels ($15.69). (Yoram Gabison)

Globrands plummets after importer says new pact with supplier will cut into profits

Shares of Globrands plummeted on Monday after the importer of tobacco and food products said its profits would be falling in the years ahead after Japan Tobacco International insisted on revising the terms of their contract. Globrands said the tougher terms would reduce profit by 4% to 9% annually as the new terms go into effect over the years 2019 to 2024. BY the final year profitability will be a third less than it was in 2017, it said. JTI is a major supplier of cigarettes for Globrands, including the Winston and Camel brands, giving it little choice but to accede. Globrands said it did not report that the talks were underway until completed for fear they would influence the final terms. The news comes six months after Globrands went public following a year of record sales and profits – 2.2 billion shekels ($590 million) and 71 million, respectively. Globrands shares ended 24.8% lower at 353.70 shekels. (Guy Erez)