Daily Roundup / Water Czar Commissioner Rains on Israelis' Hopes of Cheaper Water

And don't think that the flooding has compensated for years of drought; Mellanox downgraded; Leumi thinking of property spinoff.

Water commish rains on Israeli hopes: If Israelis thought the heavy rains deluging the land and filling the lakes and aquifers might lower the cost of water, they can forget that wet dream. "There is no connection between the volume of precipitation and the price of water," states Water Commissioner Alexander Kushnir. If once upon a time Israelis had been dependent on the Kinneret, now half Israel's water consumption is industrially produced, i.e., it is desalinated seawater and the like. So although every increase in the level of the Kinneret is still treated like hot breaking news – the fact is, it doesn't matter, in the sense that inputs invested in water treatment remain the same, Kushnir explains.

Rain's nice but Kinneret still sub-par: So, have the rains that shut down Tel Aviv's main traffic artery, flooded cities and streets and the mall in Modiin sufficed to allay worries about future desiccation? Not at all, says water commissioner Alexander Kushnir. Following years of drought, the Kinneret, otherwise known as the sweet-water Sea of Galilee, is a full three meters below its highest desirable level, according to the commissioner. That's more than 300 million cubic meters of water, specifies Kushnir to drive home the unhappy point. Moreover, the aquifers – long since Israel's main source of potable water – are short between half a billion to a billion cubic meters of water because of over-pumping during the dry years, he adds.

Clal Finance downgrades Mellanox through no fault of its own: Despite the spiky selloff of the stock, Clal Finance on Tuesday downgraded its recommendation for technology company Mellanox. Analyst Jonathan Kreizman was impelled by its fourth-quarter earnings warning and anticipation that the slump in the company's business will stay for several quarters. He feels the problem lies in the macro environment, not in the company itself or in its growth drivers such as cloud computing, Web 2.0 and storage. Kreizman says he will revisit his recommendation "if and when there are signs attesting to growth momentum resuming." Note that Mellanox slashed its fourth-quarter revenue guidance from $145-150 million to $119-121 million.

Bank Leumi may spin off property: Bank Leumi has begun steps, at this point mainly thought exercises, ahead of spinning off properties it owns into a real-estate investment trust, which would then be floated on the Tel Aviv Stock Exchange. It owns NIS 1.6 billion worth of property, according to Leumi's books. The move could also improve the bank's capital adequacy ratio. Alternatively it might simply sell the lot to an institutional investor – or a real estate investment giant like Gazit Globe - and lease it back. Leumi owns 124 out of its 264 branches and many other properties in city centers, including in the costliest area of them all – central Tel Aviv.

(With reporting by Itai Trilnick.)