Stanley Fischer Alarmed Over Global Financial System

Xinwei pulls out of Spacecom deal, but other buyers now interested; Tel Aviv shares drop after four days of gains

Stanley Fischer, vice chairman of the U.S. Federal Reserve, 2017.
Cayce Clifford/Bloomberg

Xinwei pulls out of Spacecom deal, but other buyers now interested

Spacecom, operator of the Amos satellites, said on Thursday that talks to be acquired by China’s Beijing Xinwei Technology Group had ended but that several groups had expressed interest in a merger or acquisition. The company had signed an agreement in principle for a $255 million merger with Xinwei a year ago, but the two sides had to renegotiate terms due to the loss of Spacecom’s Amos 6 satellite shortly afterwards before talks broke off altogether on Thursday. Shaul Elovitch, the telecoms tycoon whose Eurocom Group controls 55% of Spacecom, is still determined to sell the company as he contends with 1.2 billion shekels ($330 million) in debt and a securities investigation centering on his chief holding, Bezeq. However, Spacecom’s market valuation has dropped by half in the past 12 months to just 400 million shekels and his stake will fetch much less than he was due to get from Xinwei. Spacecom shares finished up 3.5% at 19.74shekels. (Guy Erez)

Fischer alarmed over global financial system

Stanley Fischer, former Bank of Israel governor and current U.S. Federal Reserve vice chairman, told the Financial Times on Wednesday he was worried that the U.S. was abandoning its role as leader of the global financial system. “The system needs a hegemon. It was Britain for a very long time. It moved to the U.S. fairly quickly,” he said. “We are left with a world that doesn’t quite have an anchor country, or a hegemon or whatever you want to call it, unless things change in the U.S.” He fretted that American politicians seem determined to reverse the regulations imposed after the 2008 financial collapse. “It took almost 80 years after 1930 to have another financial crisis that could have been of that magnitude. And now after 10 years everybody wants to go back to a status quo before the great financial crisis. And I find that really extremely dangerous and extremely short-sighted,” Fischer said. (TheMarker Staff)

Frutarom second-quarter net climbs 23%

Frutarom, the acquisition-hungry maker of flavors and fragrances, said net profit grew nearly 23% in the second quarter from a year earlier, boosted by new businesses and higher margins. Net income reached $ 37.2 million, or 61 cents a share, from $30.3 million, or 50 cents, the same time in 2016 as sales grew 14.4% to a record $343.6 million. Earnings before interest, taxes, dividends and amortization grew 22.5% to $66.9 million. “We are progressing according to plan with the full merging and integration of the 24 strategic acquisitions we made over the past two and a half years. Since the beginning of the year we have performed five additional strategic acquisitions which open up growth opportunities for us in new markets,” said CEO Ori Yehudai. He said Frutarom was on its way to meeting its target of $2 billion in annual sales by 2020. Frutarom shares ended unchanged at 258.10 shekels ($71.22). (TheMarker Staff)

Tel Aviv shares drop after four days of gains

Tel Aviv shares fell on Thursday after four straight sessions of gains. The blue chip TA-35 index lost 0.3% to end at 1,394.49 points, while the TA-125 shed 0.4% to 1,260.11, on turnover of 1.24 billion shekels ($340 million). Among the big losers, El Al Airlines dropped 6.5%, following a 14% decline the day before on weak quarterly earnings, putting it at 2.46 shekels. Bank Hapoalim declined 1.5% to 24.69 and Teva Pharmaceuticals 1.1% to 63.62.  On the plus side, Elbit System advanced 2.25% to 486.20 after a U.S. jury awarded it some $21 million in damages from Hughes Network Systems for a patent violation. Fix rose 3.75% to 75.61. Although the apparel retailer’s profit fell 22%, the decline in profit was due to the cost of the launch of its website, while sales grew. Kenon Holdings said its Cerro del Aguila unit issued $650 million senior unsecured notes at 4.125% and due in 2027. (Uri Tomer)