Business in Brief: Tel Aviv Shares Surge as Wall Street Rebounds

Naty Saidoff’s Housing & Construction raises concerns ■ Company that sells cannabis derivatives online to European customers to be listed at the Tel Aviv Stock Exchange ■ BioView shares jump 34%

FILE PHOTO: A student group exits after visiting the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, August 4, 2016.
Bloomberg

Tel Aviv shares rally in light trading after Friday’s Wall Street surge

Tel Aviv shares surged higher Sunday after Wall Street rebounded Friday to close at its highest in two weeks. U.S. shares received a boost from a strong jobs report and assurances from Federal Reserve Chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates. The benchmark TA-35 index closed 2.3% higher at 1,484.81 points, while the TA-125 added just over 2% to 1,346.94. Turnover, however, was a light 540 million shekels ($145.5 million). Dual-listed shares paced the gains, with Opko Health up 7.8% to 12.91 shekels, LivePerson up 5.4%at 70.52 and Perrigo up 4.9% at 156.30. Teva Pharmaceuticals rose 5.2% after Bank of America-Merrill Lynch raised it to a Buy and affirmed a $20 target price. Elbit Systems climbed 2.7% to 445 after it won a five-year contract worth about $333 million from the Defense Ministry for ammunition starting in 2021. (Guy Erez)

Lenders growing concerned over Naty Saidoff’s Housing & Construction

Five months after Israeli-American property investor Naty Saidoff bought control of Housing & Construction, its lenders are reportedly growing concerned about how the company is being managed. First International Bank of Israel met with H&C executives over the weekend, and Mizrahi Tefahot Bank is planning a meeting this week to warn them that the company’s 700 million shekel ($189 million) credit line could be reduced. Lenders, which include institutional investors, were taken by surprise by an announcement last week that Saidoff had given his brother Ofer an option to buy all or most of Saidoff’s 47% stake in the company by the end of 2019 for $301 million. Naty Saidoff will retain voting rights and management control even if his brother buys the stock. Lenders are also concerned that no concrete plan for reducing H&C’s 4.8 billion shekel debt has been announced. H&C shares ended down unchanged at 5.99 shekels. (Yoram Gabison and Michael Rochvarger)

Tel Aviv-listed shell company User Trend to sell marijuana products

A group of Israeli entrepreneurs plans to start trading on the Tel Aviv Stock Exchange a company that sells cannabis derivatives online to European customers. In an announcement to the TASE, User Trend — the publicly traded shell company into which the business will be moved — said it would sell cannabidiol products that have no psychoactive components under the trade name CanZon. Products will be sourced from licensed European laboratories. The group includes Alon Carmeli and Mica Friedman, former executives at the online translation and adware company Babylon; Benny Shabtai, who helped found the instant-messaging company Viber and Gil Shaham, a founder of the app-monetization startup Supersonic. User Trend said the company would be based on “knowledge and experience of internet marketing that was developed and deployed for other consumer products.” User Trend shares closed down 1.2% at 2.96 shekels (80 cents). (Guy Erez)

BioView shares jump 34% on Chinese distribution agreement

BioView shares soared on the Tel Aviv Stock Exchange Sunday after the maker of automated cell imaging and analysis platforms for clinical and research laboratories said it signed a Chinese distribution agreement with Livzon Cynvenio Diagnostics. Under the agreement, BioView’s system will be the central component of a new system for detecting lung cancer, developed by Livzon Cynvenio, that uses liquid biopsy technology. The agreement gives Livzon Cynvenio exclusive rights to market BioView’s product in China, Hong Kong, Macao and Taiwan. BioView said that if its partner meets minimum annual purchase commitments the deal will generate at least 70 million shekels ($18.9 million) over five years. Lung cancer is the most common type of cancer in China, with more than 750,000 diagnosed with it every year. China has more than 150 million smokers over age 45 who are candidates for the Livzon Cynvenio test. BioView shares finished 34.4% higher at  3.23 shekels. (Yoram Gabison)

Africa Israel bondholders find out much of debt bailout deposit is Africa Israel bonds

Africa Israel bondholders have belatedly discovered that over a third of the 90 million shekel ($24.3 million) deposit Moti Ben-Moshe made when he signed a bailout deal with them for the company was in fact Africa Israel bonds. The Israeli-German entrepreneur made the deposit to ensure bondholders didn’t lose any more money of Africa Israel, in the event he backed out of the agreement. The embarrassing news emerged after Ben-Moshe claimed on December 31 that the bondholders had failed to meet their commitments and asked for the deposit back. “It’s one big farce,” said one institutional investors who said he learned about the matter just two days ago. The bondholders’ custodian, who was responsible for accepting the bonds, has asked Ben-Moshe to top up the losses in the bonds since he made the deposit but was refused. The two sides have since agreed to extend the bailout talks through the end of January. (Shelly Appelberg)