Business in Brief: IBI Analyst: Worries About Foreign Property Companies Are Unjustified

Pinto to start as Hapoalim CEO August 1; Excellence: Israeli exposure to Brexit fallout is minimal; Tel Aviv shares gain as Brexit worries recede.

A Tel Aviv branch of Bank Hapoalim, June 13, 2016.
David Bachar

IBI analyst: Worries about foreign property companies are unjustified

Prices for the clutch of U.S. real estate companies whose bonds are traded on the Tel Aviv Stock Exchange rose as much as 1.7% on Wednesday after Yaniv Saylan, property analyst at IBI Israel Investments & Brokerage, said in a report that concerns about their financial health were unjustified. His assessment came after meeting with industry figures in New York, where Saylon concluded that the Israeli and New York real estate environments are about the same right now, which doesn’t justify the hefty yields they are trading at on the TASE. Foreign property companies on average trade at yields six percentage points above Israeli government bonds, while domestic property companies trade at just a 1.8-point premium. He blamed the negative sentiment on the collapse of Toronto’s Urbancorp and financing difficulties that New York’s Extell is experiencing right now. “We believe that the anomaly that exists right now in pricing differential is simply illogical,” he said. (Eran Azran)

Pinto to start as Hapoalim CEO August 1

Bank Hapoalim’s directors have approved Arik Pinto’s stepping into the job as CEO on August 1, Israel’s largest lender said on Wednesday. In addition, Pinto announced a round of new appointments that will go into effect before August, led by Erez Yosef, who will succeed Pinto as deputy CEO and chief operating officer starting July 1. Yosef had served as head of financial and management information of the finance division. Among the other appointments, Eli Zahav was named deputy CEO for credit and finance at Hapoalim’s Isracard credit card unit; Jackie Cohen as head of the business branch in the bank’s business division; and Ronen Midan as head of the bank’s Nostro investments in the international finance and banking division. Pinto takes over the top job at Hapoalim from Zion Kenan, who said in March he would step down after seven years at the helm. Pinto, who has been at the bank since 1980, worked very closed with Kenon in recent years. (Omri Zerachovitz)

Excellence: Israeli exposure to Brexit fallout is minimal

Publicly traded Israeli companies have little or no exposure to risks connected with Britain’s leaving the European Union, although a few like Israel Chemicals could be hurt indirectly, investment house Excellence said in a report on Wednesday. ICL has operations in Britain but the real risk from the Brexit is a strengthening of the U.S. dollar, which would hurt the company’s sales of potash and other fertilizers. “A strong dollar will lead to lower commodities prices, which will hurt ICL and the attractiveness of all sectors whose sales are connected to farm commodities,” Excellence said. Other Israeli sectors with “moderate exposure” to the Brexit are banks, pharmaceuticals, defense and all export-oriented companies. Banks have little direct exposure but their valuations will be hurt by declining bank shares overseas. Gazit Globe’s European shopping centers, which account for 47% of its assets, should be relatively unaffected because they are focused on basic consumer needs, like supermarkets, it said. (Shelly Appelberg)

Tel Aviv shares gain as Brexit worries recede

Tel Aviv shares ended higher for a second day as Brexit worries began to cool. The benchmark TA-25 index ended up 0.5% at 1,399.53 points, while the TA-100 climbed 0.6% to 1,211.88, on turnover of 1.12 billion shekels ($290 million). Both the dollar and the euro lost ground to the shekel, with the greenback down more than 0.5% to a Bank of Israel rate of 3.8550 while the euro lost 0.47% to 4.2811. Leading TA-100 stocks higher, Nice Systems rose 4.1% to end at 242.70 shekels. Cellular stocks rallied, with Partner Communications finishing up 3.8% at 17.24 and Cellcom Israel ahead 3.6% at 24.53. Real estate stocks were higher, too, with Azrieli Group closing 2.85% higher at 162.30. Bank stocks were lower, paced by a 1.9% drop in Bank Leumi to 13.61. Kitov Pharmaceutics plunged 16.9% to 62 agorot after completing a $12 million follow-on offering on Wall Street. (Shelly Appelberg)