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Business in Brief / Cellular Firms Expected to Be Dropped From the Benchmark Tel Aviv-25 Index

'Going concern warning' still attached to IDB Development's results; Hamashbir reports NIS15m quarterly loss as it gets out of the supermarket business; TASE nearly unchanged overall, but Oil and Gas index continues to lose ground.

Tali Mayer

Cellular firms expected to be dropped from the benchmark Tel Aviv-25 index

Unless there are major surprises, in about two weeks both cellular service providers whose shares make up part of the benchmark Tel Aviv-25 index are expected drop out of the Tel Aviv exchange’s most prestigious index. Partner Communications, which does business as Orange, and Cellcom Israel are both expected to be excluded from the index, which features the exchange’s leading stocks as measured by a number of criteria, most importantly market capitalization. Partner shares have dropped by 29% over the last year while Cellcom shares have lost 23% of their value. Their perches in the Tel Aviv-25 are expected to be occupied by flavoring manufacturer Frutarom Industries and Melisron, the country’s second-largest shopping mall operator after the Azrieli Group. The adjustment in the index is carried out twice a year. (Ami Ginsburg, Amir Teig and Michael Rochvarger)

‘Going concern warning’ still attached to IDB Development’s results

IDB Development, one of the two companies at the top of the IDB group’s corporate pyramid, issued its quarterly financial results yesterday, still burdened by a “going concern warning” indicating that the firm’s auditors have doubts about the company’s ability to remain in business. IDB Development lost 134 million shekels ($34 million) in the third quarter of the year, a little more than half the 211 million shekel loss it suffered in the comparable quarter last year. For the first nine months of the year, IDB Development had a loss of 207 million shekels, compared to 105 million for the period last year. The major assets that IDB owns include stakes in Clal Insurance and Discount Investments, through which it holds Super-Sol, Cellcom, Property and Building, Adama and Elron. IDB Development closed down 2.8% yesterday on the Tel Aviv Stock Exchange. (Michael Rochvarger)

Hamashbir reports NIS 15m quarterly loss as it gets out of the supermarket business

Hamashbir 365 Holdings lost about 15 million shekels ($3.8 million) attributable to shareholders against the backdrop of slack consumer demand, at least in part attributed to this summer’s war with Hamas in Gaza. (It reported a 19.3 million shekel loss for the first nine months of the year.) Another drag on earnings came with the department store chain’s decision to divest of its Cost 365 chain of supermarkets. Hamashbir’s foray into the supermarket business cost it accumulated losses of about 30 million shekels. It sold its Carmiel store to Rami Levy supermarkets and its other four outlets to division CEO Nissim Hassan. Against the backdrop of last summer’s fighting, the company’s revenues in the third quarter declined from 725 million shekels in 2013 to 678 million shekels this year. Revenues in its department store division dropped by nearly 10%. Its New-Pharm drug store division had quarterly revenues of 184 million shekels, a decline of nearly 5%. (Eran Azran)

TASE nearly unchanged overall, but the Oil and Gas index continues to lose ground

Monday trading on the Tel Aviv Stock Exchange continued to be conducted with an eye to the drop in world oil prices and concern about the deteriorating economic situation in Russia, a major oil producer. Israeli oil and gas companies continued to garner attention after Leumi Capital expressed concern about the sector. The benchmark Tel Aviv-25 index closed at 1,475.03, up by just 0.03% on the day. The broader Tel Aviv-100 index went slightly in the other direction, however, closing down by 0.02% at 1,306.70 points. Corporate bonds generally traded sharply lower and the dollar hit a high against the shekel not seen in two years. The representative dollar rate was set at 3.914 shekels, up 0.64% since Friday. The euro rose by 0.81% to 4.876 shekels. The Oil and Gas index, which fell by 2.7% on Sunday, lost another 1.8% yesterday. Trading volume for the day was 1.23 billion shekels. Among stocks of interest were Oil Refineries, which is expected to benefit from volatile oil prices. Its shares closed 3.6% higher. By contrast, Allot Communications shares dropped by 5.2%. (TheMarker)