The Ticker: Interest Rate Remains Unchanged at 0.1%

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Israeli shekels are worth more in euro or dollar terms than for many years.Credit: Reuters

Interest rate remains unchanged at 0.1%

Israel’s interest rates will remain unchanged for yet another month, the Bank of Israel announced yesterday. Israel’s representative rate has been at an all-time low of 0.1% for several months. Explaining its decision, the central bank stated, “The increasing decline in exports over the past few months reinforces the [interest rate] committee’s analysis that given the developments in the inflationary environment, economic growth in Israel and the world, and the exchange rate, as well as the monetary policy of major central banks, [Israel’s] monetary policy will remain expansionary for a long time.” It noted a worrying contraction in exports for the year, while private consumption is driving Israel’s economic growth. (Omri Zerachovitz)

Food company Strauss Q1 profits up, exchange rates bite into sales

Israeli food company Strauss Group reported 5.1% growth in quarterly net profit yesterday, contrary to the broader market trend, saying that innovation and efficiency measures outweighed negative currency effects. A maker of snacks, fresh foods and coffee, Strauss reported net profit of 107 million shekels ($27.6 million) in the first three months of 2016, up from 102 million shekels a year earlier. Revenue slipped 2.6% to 1.88 billion shekels, but rose 4.7% excluding foreign-exchange effects. Strauss is the second-largest company in the Israeli food and beverage sector. “We believe that the measures we are applying in our key countries of operations, including Brazil, the United States, Russia, China and Israel, will continue to contribute to the bottom line, despite the challenges we face in a tough competitive environment,” said CEO Gadi Lesin. (Reuters)

Cellcom Q1 profit up, revenue dips

Israel’s largest mobile operator, Cellcom, reported a rise in quarterly profit yesterday as lower expenses offset a drop in revenue stemming from fierce competition in the sector. Israel’s cellphone industry was shaken up in 2012 with the entry of a host of new operators, sparking a price war that led to steep drops in subscribers, revenue and profit at Cellcom and two incumbent rivals. Cellcom said it earned 59 million shekels ($15.2 million) in the first quarter, up from 26 million shekels a year earlier when it was hit by a 30-million-shekel one-time expense. Revenue slipped 3.8% to 1.02 billion shekels, as service revenues dipped 3.3% due to a price erosion resulting from intensified competition. Cellcom added 11,000 customers to its TV service in the quarter, bringing its subscriber base to 75,000 households. Its mobile subscriber base fell 2.5% from a year earlier, to 2.813 million. (Reuters)

Partner Q1 profit drops after break with Orange

Partner Communications, Israel’s second-largest mobile operator, yesterday reported a drop in first quarter profit and sales as competition in the cellular market continued to erode service revenues. Israel’s mobile phone industry was shaken up in 2012 with the entry of a host of new operators, sparking a price war that led to steep drops in subscribers, revenue and profit at Partner and two rivals. Partner also cut its final ties with French telecoms group Orange earlier this year, after nearly two decades of operating under the name Orange. Partner reported a profit of 14 million shekels ($3.6 million) in the first three months of 2016, down from 25 million shekels a year earlier. Revenue slipped 7% to 977 million shekels. The company’s subscriber base fell 3% to about 2.69 million, while its total cellular market share dropped to 26% from 28% a year earlier. (Reuters)

TASE up slightly after volatile trading day

The Tel Aviv Stock Exchange closed mixed, but with a positive bias, after a volatile day yesterday. The blue-chip Tel Aviv-25 Index gained 0.4% to close at 1,413.94 points, while the broader Tel Aviv-100 Index gained 0.5% to close at 1,226.34 points. Bank shares gained 0.1%, while communications shares dropped 0.7% and insurance shares dropped 0.4%. Turnover for the day totaled 1.08 billion shekels ($278.4 million). Notable shares included cellular firms Cellcom, up 2.6%, and Partner, down 0.7%, both of which published quarterly results yesterday. Melisron gained 3.8%, and Israel Chemicals and parent company the Israel Corporation gained 5.3% and 4.6%, respectively. (Omri Zerachovitz)