Israeli Energy Shares Drop Amid Concerns About Egyptian Gas Exports

Business in Brief | Private equity firm Permira looking to sell drip-irrigation company Netafim and insurers lead gains for Tel Aviv shares.

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Energy shares drop amid concerns about Egyptian gas exports

Israeli energy shares dropped sharply yesterday amid concerns that Egypt might opt not to import gas from Israel’s Tamar field for a now idled liquefied natural gas plant. Daily News Egypt reported late last week that the Italian gas company ENI had won backing from Cairo to export part of the gas produced from its Zohr field in the Mediterranean to international markets via its Damietta LNG plant. “We still haven’t seen an official report from Egypt, but it is reasonable to assume that such a scenario could happen and raises the risk of Tamar’s exporting gas to the facility in Egypt,” said Lior Lublin, energy analyst at IBI Israel Brokerage & Investments. However, he said permission for ENI to export could open up the door for Israeli sales to the Egyptian domestic market. Shares of Delek Drilling and Avner, two of Tamar’s partners, both ended down about 3% to 14.35 shekels ($3.71) and 2.70 shekels, respectively.

Private equity firm Permira looking to sell drip-irrigation company Netafim

The European private equity firm Permira is looking to sell Netafim, the pioneering maker of drip- and micro-irrigation products, for a price that could reach a company value of $1.4 billion. Permira bought a 61% stake in Netafim five years ago for $850 million, and operates it as a joint venture with Kibbutz Hatzirim. The fund typically holds onto its investments for five years and was also moved to sell because Netafim has shown a sharp improvement in results, with 2016 operating profit expected to grow 6% to $115 million on revenues of $875 million. Likely buyers are another foreign private equity fund or a U.S. or European farm-equipment maker. Permira and Kibbutz Hatzirim have been consulting with international investment banks about the sale, weighing options for a full or partial sale on an initial public offering, and are expected to choose one early next year.

Insurers lead gains for Tel Aviv shares

The Tel Aviv Stock Exchange ended higher in light trading yesterday, led by gains for insurance shares. The blue-chip TA-25 index finished up 0.1% at 1,461.10 points, while the TA-100 advanced 0.3% to 1,276.99, as just over 1 billion shekels ($260 million) in shares changed hands. Among blue-chip gainers, Perrigo rose 3.4% to close at 330 shekels, and Mizrahi Tefahot Bank added 2.1% to 54.89. Insurance stocks were led higher by a 2.9% gain for IDI Insurance to end at 185.50. TowerJazz finished 1.6% up at 74.85 shekels after Needham & Co. set a $25 target price for its New York-listed shares. Housing & Construction Limited was awarded a 10-shekel target price by IBI Israel Brokerage & Investments, but the recommendation only gave the stock a 0.05% lift to 7.55. In the fixed-income market, the government’s 10-year shekel bond rose 0.41% to reduce its yield to 2.18%. The 10-year Galil rose 0.22% to a yield of 0.63%.