The Ticker: Central Bank Intervention Lifts Dollar to NIS 3.7

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Bank of Israel Governor Karnit Flug, June 2014.Credit: Michal Fattal

The dollar reached an 18-month high against the shekel on Tuesday after the Bank of Israel intervened in the market to buy foreign currency. Dealers estimated the central bank bought between $150 million and $200 million of foreign currency, causing the greenback to strengthen more than 1% to a Bank of Israel rate of 3.7080 shekels. The euro appreciated even more, gaining 1.4% to 4.67 shekels. The shekel has lost about 8% against the dollar since the end of July, but against a trade-weighted basket of currencies that better represents the Israeli currency it is down just 0.6%. “The real depreciation of the shekel against the basket still isn’t enough either to encourage exports or to raise inflationary expectations,” said Ofer Klein, chief economist at Harel Insurance & Finance. “The Bank of Israel is more likely to keep buying forex before it lowers interest rates again.” (Eran Azran and Moti Bassok)

SodaStream plunges on disappointing sales

Shares of SodaStream, the Israeli maker of home soda machines, plunged on Tuesday after its CEO predicted that third-quarter revenue would fall far short of analysts’ expectations and said it would reevaluate its business strategy. Citing lower-than-expected demand in the United States, the company estimated revenue would reach about $125 million for the quarter ending September 30, compared to an average forecast of $154.1 million by analysts surveyed by Thomson Reuters I/B/E/S. SodaStream said operating profit would also be below expectations, at about $8.5 million. “We are very disappointed in our recent performance,” CEO Daniel Birnbaum said in a statement. “The third-quarter results are a clear indication that we must alter our course and improve our execution across the board. We have already begun a strategic shift of the SodaStream brand towards health and wellness.” Shares of SodaStream were down 21% at $21.78 in late morning New York time. (Eran Azran)

Clal resolves dispute with Hyperion

The U.S. drug maker Hyperion and Clal Biotechnology said on Tuesday they agreed to resolve their dispute over the alleged manipulation of trial data for a diabetes drug Hyperion bought from Clal. Hyperion said it would allow Clal to evaluate the clinical efficacy of and potential regulatory path for the drug, DiaPep277, that a party other than Hyperion may wish to pursue. The companies agreed not to take any additional legal steps until October 31. In June, Hyperion bought Clal’s Andromeda Biotech unit, which is developing DiaPep277, for $12.5 million up-front and milestone payments that could have reached $570 million. But in September, Hyperion stopped the drug’s development after alleging that Andromeda’s employees were engaged in “manipulating a clinical trial to obtain a favorable result. Clal shares closed up 8.2% at 4.35 shekels ($1.17). (Reuters)

Shares trade sideways ahead of holiday

Tel Aviv shares traded sideways on Tuesday in the last day of the trading week before the long Sukkot holiday weekend. The Tel Aviv Stock Exchange’s benchmark TA-25 index eked out an 0.04% gain to end at 1,462.97 points while the broader TA-100 index edged down 0.1% to 1,311.07. Turnover was 1.32 billion shekels ($354.6 million). Food makers and retailers were hit by a protest against high prices. Supermarket chains Supersol and Rami Levy were both down about 3% to 10.04 shekels and 183.70 shekels, respectively. Manufacturers Strauss and Osem both lost about 2.4% to 64.40 shekels and 77.21 shekels. Pluristem gained 4.4% to end at 11.55 shekels after it reported on Tuesday that a patent it owns was upheld by the European Patent Office in an amended form. In the fixed-income market, the government’s 10-year shekel bond extended its gains by 0.17% on Tuesday to bring its yield to an all-time low of 2.26%. (Eran Azran)