Business Briefs / Dollar Reaches Two-year High on Downgrade for Israel’s Outlook

Cimatron rallies after buyout offer from 3D Systems; bond prices steady after rough Sunday, but stocks fall.

Emil Salman

The dollar strengthened Monday to its highest level in two years, in the first day of currency trading since Fitch lowered its outlook on Israeli sovereign debt to Stable from Positive. The U.S. currency gained 0.8% on the shekel to a Bank of Israel rate of 3.864, while the euro weakened 0.3% to 4.7936. Fitch retained its A rating for Israel but cited a slowing economy and growing defense spending as concerns for the future. “Such negative news, which acts as a red light to investors and forex traders, has brought a wave of shekel selling since Friday,” currency trader FXCM said, noting the selling had caused the dollar to break through its 3.85 resistance level. FXCM predicted that the dollar rate would reach 3.90 shekels before the end of the year, noting Israel’s deteriorating security situation. (Eran Azran)

Cimatron rallies after buyout offer from 3D Systems
Cimatron shares soared in Nasdaq trading Monday after the 3D printer maker 3D Systems Corporation said it would buy Israel’s Cimatron for about $97 million to strengthen its position in the fast-growing 3D design and manufacturing business. 3D Systems said it would pay $8.97 a share for the Givat Shmuel-based Cimatron, a premium of 47.5% to the stock’s closing price on the Nasdaq on Friday. Cimatron products are used by companies worldwide for their 3D production molds, tools and dies. 3D Systems said the deal would add to adjusted profit and cash flow immediately after its expected close in the first quarter of 2015. Cimatron shares were up 42% at around noon New York time, at $8.64. (Reuters)

Low interest rates weigh on Clal profits
Clal Insurance saw its third-quarter profit drop 57% from a year earlier, to 70 million shekels ($18.1 million), as low interest rates forced it to recapitalize reserves it set aside mainly for life insurance old-age payouts. The provision for low interest rates accounted for 101 million of the 150 million shekels of one-time charges the insurer made for the three months. “It’s a technical loss. The moment that interest rates rise, profits will return,” CEO Izzy Cohen told TheMarker. The profit decline cut Clal’s nine-month profit by 44%, to 321 million shekels. Premium income declined 3% in the past nine months, to 6.78 billion shekels, Clal said. But assets under management rose 10% by the end of the third quarter. Shares of Clal ended down 2.2% at 55.20 shekels. (Asa Sasson)

Bond prices steady after rough Sunday but stocks fall
Tel Aviv bond prices steadied after starting the session sharply lower Monday, but stocks continued lower. The Tel-Bond 20, 40 and 60 indices, which tumbled on Sunday amid concerns about the finances of many leading holding companies, ended down about 0.06%- 0.07%, recovering from losses of as much as 0.6%. Government bonds were down sharply, however, with the 10-year Shahar bond finishing 0.22% lower, to raise its yield to 2.16%. The inflation-linked Galil bond, due in 2023, fell 0.13% to a yield of 0.48%. In the share market, the TA-25 and TA-100 indices both closed about 0.1% lower, at 1,444.44 and 1,287.76 points, respectively. Turnover was a heavy 1.35 billion shekels ($350 million). IDB Development Corporation, whose shares and bonds swooned Sunday following the abortive initial public offering in its Adama unit, rebounded, with IDB shares up 5.6% at 2.26 shekels. TowerJazz led gainers among TA-100 stocks, rising 7.5% to 49 shekels after a foreign investment bank started coverage of the semiconductor company with a Buy and U.S. target prices of $20. (Eran Azran)