The Ticker: Tel Aviv Rallies After Historic U.S. Rate Hike

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Tel Aviv Stock Exchange.Credit: Eyal Toueg

Tel Aviv rallies after historic U.S. rate hike

Tel Aviv shares joined a global stock market surge a day after the U.S. Federal Reserve raised interest rates for the first time in nine years. Markets were encouraged by Fed Chair Janet Yellen’s assurance that further monetary tightening would be gradual and heavily dependent on inflation, which remains below the 2% target. The Tel Aviv Stock Exchange’s TA-25 and TA-100 indices both rose about 1.2% to finish at 1,519.08 and 1,311.13 points, respectively, on turnover of nearly 1.8 billion shekels ($460 million). Bond prices were higher, with the government’s 10-year Shahar bond advancing 0.33% to lower its yield to 2.13%. The dollar strengthened against the shekel more than 0.4% to a Bank of Israel rate of 3.8950 shekels. “The Bank of Israel is going to ignore the hike in the U.S. interest rate and leave the [Israeli] rate unchanged because of low inflation, the strong shekel and relatively slow economic growth,” said Leumi Capital Markets. Among top gainers, Mazor Robotics surged 6.8% higher to 18.32 shekels after reporting it sold its 100th Renaissance system. TowerJazz rose 4.1% to 60.60 shekels after it signed an agreement worth $35 million to aid an unnamed Asian government semiconductor laboratory. (Omri Zerachovitz)

Tesla says it is sticking with Mobileye

Electric car maker Tesla Motors will continue to use Mobileye’s driver-assistance technology in its cars rather than develop its own, CEO Elon Musk told Fortune magazine Thursday. The company was the subject of an article by famed computer hacker George Hotz, who called the Israeli company’s technology “absurd” and said he would improve on it with off-the-shelf electronics. Hotz asserted that Musk offered him a lucrative contract if his technology proved better. But Tesla spokesman Ricardo Reyes told Fortune that the article misrepresented Tesla’s position and debunked some of Hotz’s claims. “It is essentially impossible for any small company lacking extensive engineering validation capability to be able to produce an autonomous driving system,” Reyes said. Shares of Mobileye, which have been under pressure from short sellers, were up 3.3% to $41.14 late morning in New York. (TheMarker Staff)

Incoming Discount Investment CEO agrees to $3.1 million pay cut

Gil Sharon, who has been tapped to take over as CEO of holding company Discount Investment Corporations, is apparently ready to take a 12 million-shekel ($3.1 million) pay cut even before he starts work. TheMarker has learned that Sharon agreed on Wednesday to a five-year pay package worth 59 million shekels, instead of the 71 million shekels he was originally offered. Minority shareholders objected the original package, forcing Discount’s controlling shareholder, Eduardo Elsztain, to put off a vote to approve it. Sharon will receive a 200,000-shekel monthly salary and a 1.8% stake in Discount, but the new package reduces the shares he will get in Discount subsidiaries Supersol and Cellcom Israel to a value of just 18 million shekels, rather than 30 million. At least one minority shareholder, however, said he wasn’t impressed. “It’s still shocking – that’s not a big concession at all,” griped the shareholder, who asked not to be named. Discount shares closed up 0.8% at 6.50 shekels. (Shelly Appelberg)

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