Business in Brief: Tel Aviv Shares End Mixed as Banks Stumble

Revised MSCI index to hurt TASE efforts at luring foreign investors; Elbit wins $200 million order from Switzerland for drone; Israel Corporation profits declined in third quarter.

Bloomberg

Revised MSCI index to hurt TASE efforts at luring foreign investors

A decision by the global stock index company MSCI to include Israeli companies traded overseas in the MSCI Israel index is likely to undermine the Tel Aviv Stock Exchange’s efforts to lure foreign investors to the bourse and beef up trading volumes, analysts told Bloomberg News Thursday. The revised index, which goes into effect November 30, will include companies like Check Point Software Technologies, Mobileye and Taro, none of which trade on the TASE, said Daniel Rapoport of the equities and futures desk of Bank Leumi. Many investors weight their portfolio against MSCI indices, which means they will hold fewer stocks traded only on the TASE. The TASE has been trying to lure foreign investors after MSCI moved Israel from the emerging market category to developed-economy category in 2010, which led to a 36% decline in trading volume as foreigners reduced their Israel weighting. (TheMarker)

Elbit wins $200 million order from Switzerland for drone

Defense electronics maker Elbit Systems said on Thursday it had won an approximately $200-million contract from the Swiss Federal Department of Defense, Civil Protection and Sport for drones. The company said it would supply Switzerland with its Hermes 900 HFE Unmanned Aircraft Systems and an advanced ground segment for command, control and communications over the next four years. The contract comes after the DDPS in June 2014 chose Elbit as the preferred supplier for the UAS 15 new reconnaissance drone program. The Hermes 900 HFE system, to be supplied to the Swiss Air Force, is an advanced adverse-weather unarmed reconnaissance drone. “Switzerland is a very important market for Elbit Systems,” said Elbit CEO Bezhalel Machlis. “We hope this project will pave the way for additional projects both in Switzerland and worldwide.” Elbit shares ended down 1.8% at 343.60 shekels ($88.59). (TheMarker)

Israel Corporation profits declined in third quarter

Israel Corporation, the holding company controlled by Idan Ofer, reported a steep drop in quarterly profit on Wednesday because of unusually higher profits a year earlier. The conglomerate earned $76 million in the third quarter, down from $719 million a year earlier when it recorded combined profit of $678 million from five companies it spun off at the start of 2015 to sister company Kenon Holdings. Israel Corporation retained its 46% holding in Israel Chemicals, whose contribution to profits slipped to $59 million from $94 million, and 37% of Oil Refineries, Israel’s biggest refinery, which contributed $7 million, up from $3 million last year. “Israel Corp views its holding in ICL as a strategic holding and will refrain from making investments in any new companies,” it said in a statement. Israel Corporation shares rose 1.9% to end at 851 shekels ($219.42). (Reuters)

Tel Aviv shares end mixed as banks stumble

Tel Aviv shares shuffled to a close in the final day of the trading week, with the main indices ending little changed. The benchmark TA-25 index eked out an 0.08% gain to finish at 1,561.49 points while the TA-100 ended unchanged at 1,349.99. Turnover, however, was brisk, with nearly 1.9 billion shekels ($490 million) changing hands. Finance shares were mostly lower, with Bank Leumi down 1.5% to 13.93 and Harel Insurance off 2.4% at 15.20. But Teva Pharmaceuticals, the volume leader, extended gains, adding 1.1% to 246.60 and Israel Chemicals rose 3.2% to a close of 19.26. The bond market was retrained, with the government’s 10-year Shahar bond edging up 0.05% to a yield of 2.09%. Forex trading was also subdued after a stormy day on Wednesday. The dollar strengthened less than 0.1% to a Bank of Israel rate of 3.88 shekels (Omri Zerachovitz)