Business in Brief: Harel Buys 3% of Tamar Gas Field From Noble

Bank of Israel intervenes in currency market; Mutual funds see big redemptions in 1st half; Tel Aviv shares edge higher in quiet trading.

Albatross

Harel buys 3% of Tamar gas field from Noble

Harel Insurance & Finance said late Monday it had agreed to buy a 3% share in the Tamar natural gas field from Texas-based Noble Energy, at a base price of $369 million. Harel said the final sum would include reductions for money Noble gets from the field starting January 1, 2016, to the date of the acquisition’s closing and other factors. Against that, Noble will be entitled to payments if the Tamar partners sign a gas-export agreement with Egypt before the end of the year. The money for the deal will come from the insurer’s own funds, as well as from clients and its Israel Infrastructure Fund, which has an option to buy another 1% in the field. The acquisition comes as Noble seeks to raise capital to develop the Leviathan field and to meet a government deadline to reduce its 36% stake by 11 percentage points. (TheMarker Staff)

Bank of Israel intervenes in currency market

The Bank of Israel bought hundreds of millions of dollars of foreign currency Monday, as the dollar lost ground from a recent high of 3.90 on June 27 in the wake of the Brexit vote, dealers said. One dealer said the central bank started buying dollars when the rate fell to around 3.84 shekels. The official Bank of Israel rate was set at 3.8560 – a gain of 0.3% for the day – although in late trading the greenback weakened to 3.8509 shekels. The move comes as the intervention policy comes under fire from Avi Simhon, chairman of the National Economic Council, for hurting the economy by deterring import competition and raising prices for consumers. In response, the central bank told Reuters that its position had not changed. “The hardship facing Israel’s exports industries cannot be ignored, especially given its importance to growth and productivity in Israel,” it said. (Reuters and TheMarker Staff)

Mutual funds see big redemptions in 1st half

Israeli mutual funds turned in a moderately good performance in a dismal market during the first half of the year, but investors still opted to take money out of the funds. The average return for January-June for mutual funds was a modest 0.3%, at a time when the Tel Aviv Stock Exchange’s TA-100 index lost 7% – although the decline was somewhat offset by gains in the bond market. But mutual fund investors pulled 16.6 billion shekels ($4.3 billion) out of the funds in the six months, reducing total assets under management by 6%, to 214.5 billion shekels. Most of the redemptions were in general bond funds, which suffered 5.2 billion shekels in withdrawals, while money funds were not far behind with 4.8 billion shekels in withdrawals. The impact of the Brexit vote, on the other hand, was limited, with 980 million shekels redeemed in the two trading days afterward, or less than 0.5% of industry assets. (Assa Sasson)

Tel Aviv shares edge higher in quiet trading

Tel Aviv shares edged higher in light trading Monday as Wall Street was closed for the July 4 holiday. The benchmark TA-25 index ended up just 0.07% at 1.413.86 points, while the TA-100 advanced 0.3% to 1,228.02, as just 799 million shekels ($207.2 million) in shares changed hands. Insurance companies were higher, led by a 2.9% gain for Migdal. Phoenix rose 2.3%, extending Sunday’s gains, to end at 9.40 after parent company Delek Group said it had reached a nonbinding agreement to sell the insurers to a Chinese company. Delek Group shares, meanwhile, climbed 2.3% to 778 shekels after Bank of America Merrill Lynch initiated coverage of the company with a Buy and a 950-shekel price target. Telecoms companies were also higher, with Partner Communications advancing 2.3% to 17.99 shekels, but banks were lower. Hapoalim and First International Bank of Israel both fell 1.1%, to finish at 19.19 and 46.78 shekels, respectively. (Uri Tomer)