Energy shares lower after Leumi Capital Markets trims share ratings
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Israeli energy shares were lower on Sunday after Leumi Capital Markets warned that the growing presence of global energy companies like Shell, ENI and Rosneft, as well as plans to move forward with the Turk Stream gas pipeline, were undermining prospects for Israeli gas exports. As a result, said analyst Ella Fried, it was likely that the Leviathan offshore natural gas field would end up selling more to the Israeli domestic market, cannibalizing sales from the Tamar field.
Leumi lowered its ratings for Avner, Delek Drilling and Isramco to Market Perform from Outperform. It raised its rating for Ratio – the only company that holds a stake in leviathan but not Tamar – to Outperform from Market Perform. Fried said Ratio would benefit as investors slowing began awarding higher valuations to companies with undeveloped energy assets, like Ratio, reversing the trend until now. Avner and Delek Drilling led the declines, both falling about 1.1% to 2.40 shekels (63 cents) and 12.69 shekels, respectively. (Eran Azran)
Teva agrees to pay $225 million in settlement with California plaintiffs
Teva Pharmaceuticals’ Barr Laboratories unit reached a $225-million settlement in a California class action suit that had accused the drugmaker of keeping a generic version of Bayer AG’s antibiotic Cipro off the market. Plaintiffs alleged that in the late 1990s, Bayer allegedly paid $398 million to Barr, which was subsequently owned by Teva, not to market a generic version of Cipro.
The plaintiffs, a group of nonprofits and individuals in California who used Cipro, claimed that the agreement between the two companies drove up the price of the drug and violated California’s antitrust law. It marks the second multimillion-dollar payment from Teva in the last two months, after it agreed last month to pay more than $519 million to settle U.S. criminal and civil allegations that it bribed overseas officials to win government contracts. The settlement requires an approval from California’s highest court. Shares of Teva ended up 1.6% at 130 shekels ($34.23). (Yoram Gabison)
IDB Development loses suit over using Clal Insurance shares as collateral
IDB Development Corporation will issue as much as 300 million shekels ($78.9 million) in new bonds shortly, after the High Court of Justice ruled last Thursday that it could use only a small part of its holding in Clal Insurance as collateral for bonds. The ruling was a victory for Dorit Salinger, the Capital Markets Authority commissioner, who ordered IDB to sell down its Clal stake in blocks of 5% and sought to bar it from using a 19% block of Clal stock to back the bonds.
As a result, IDB will have to repay early 86 million shekels of bonds it had already sold backed by the Clal shares, and issue new debt backed by the proceeds of the next 5% block it is due to sell and dividends due it. IDB needs the cash to repay some 156 million shekels in loans coming due at the end of the first quarter. (Michael Rochvarger)
Insurers get boost from report allowing them to resume paying dividends
Tel Aviv shares finished higher on Sunday as insurance stocks got a boost from reports that the Capital Markets Authority will allow them to resume paying dividends. Harel led the way higher, gaining 4.9% to 18.92 shekels ($4.98), with Menora up 4.6% by close to 34.84 and Phoenix up 3.3% to 13.74. The blue chip TA-25 index ended up more than 0.1% to 1,425.57 points, while the TA-100 added close to 0.2% to 1,252.57, as about 644 million shekels in shares changed hands.
Other big gainers were Elbit Systems’ 1.3% advance to 414.10 shekels. Israel Chemicals extended losses from last week, falling 2% to 17.33 shekels. ICL has been under pressure since fellow fertilizer maker Potash Corporation of Saskatchewan reported a lower-than-expected quarterly profit last Thursday due to weak prices. LivePerson led TA-100 stocks lower on a 6.2% drop to 27.35 shekels. Union Bank was also sharply lower, falling 2.6% to 15.89 in unusually heavy trading. (Uri Tomer)