Business in Brief: Israel Approves Independent Capital Markets Authority

Osem reports 6.7% drop in fourth-quarter profit, BioLight Nasdaq offering stalls at pricing stage and Tel Aviv shares end higher, euro gains on shekel.

Finance Minister Moshe Kahlon walks past a giant projection of the Israeli flag.
Marc Israel Sellem

Cabinet approves independent capital markets authority

Israel’s cabinet approved creating an independent agency to oversee the capital markets, as the Organization for Economic Co-operation and Development and International Monetary Fund have long urged. Under the proposal submitted by Finance Minister Moshe Kahlon, the Capital Markets, Insurance and Savings Division of the Finance Ministry will be spun off into an independent entity called the Capital Markets, Insurance and Savings Authority. Although it will still be answerable to the finance minister, who will appoint its head, the new capital market’s authority – like the Antitrust Authority – will have its own budget and set its own priorities. The authority’s mandate calls for it to act as a watchdog for insurance policyholders and clients of other financial institutions, ensure stable markets, competition and proper management, and encourage the use of state-of-the-art technologies. There are no precise details on when the new authority will begin operations, but last month officials said it would be later this year. (Assa Sasson)

Osem reports 6.7% drop in fourth-quarter profit

Osem reported a 6.7% drop in quarterly net profit on Sunday, on lower sales. Israel’s third-largest food producer said it earned 90.4 million shekels ($23.3 million) in the fourth quarter, down from 96.9 million shekels a year earlier. Sales slipped 2.9 % to 1 billion shekels due to the new Food Law, which limited manufacturers’ ability to charge supermarkets for services, as well as discounts, promotions and price reductions. Prices for Osem products effectively fell 3% last year, the company said. Meanwhile, overseas sales – mainly in Europe – plunged 12.5% to 154 million shekels, which Osem attributed to the strengthening of the shekel and Czech koruna, which raised its costs. Minority shareholders are slated to vote later this week on an offer by Swiss food giant Nestlé, which owns close to two-thirds of Osem, to buy them out at 82.50 shekels a share. Osem shares ended down 1.7% at 78 shekels. (Yoram Gabison and Uri Tomer)

BioLight’s Nasdaq offering stalls at pricing stage

Efforts by BioLight, a company developing medical devices for treating glaucoma, dry eye syndrome and age-related macular degeneration, said it failed to complete pricing for a planned $12-million share offering for trading on the Nasdaq that was supposed to take place on Thursday. The company, which is controlled by Chinese investor Patrick Lau, former Teva Pharmaceuticals CEO Israel Makov and Dilip Shanghvi, founder of India’s Sun Pharmaceuticals, said it would try again at a later date when market conditions were better and after consulting with underwriters Feltl & Company and Rodman & Renshaw. The company had income of just $335,000 last year against expenses of $7.2 million. But with just $13 million in cash on its books, it will need to raise capital soon. BioLight, whose Tel Aviv Stock Exchange share price has tumbled by more than 50% in the last 12 months, lost another 14.7% Sunday to end at 18.44 shekels ($4.76). (Yoram Gabison)

Tel Aviv shares end higher, euro gains on shekel

Tel Aviv shares ended their fifth straight session higher Sunday, while the euro rallied against the shekel after the S&P 500 index ended at its highest level of the year on Friday and investors reassessed this week’s stimulus measures by the European Central Bank. The benchmark TA-25 index finished up 0.6% at 1,487.65 points, while the TA-100 gained nearly 0.7% to 1,278.63 points as 608 million shekels ($156.9 million) in shares changed hands. Blue chips were led by gains of 1.6% for Bezeq, to 8.82 shekels, and a 2.7% advance to 531 shekels for Perrigo. Perion Network led TA-100 stocks higher on a 7.6% rise to 10.12 shekels. Elco Holdings ended up 5.65% at 37.42 shekels after reporting that it had received its 325 million shekels in proceeds from the sale of land in China. But Israel Chemicals ended down 1.15% to 17.20 shekels after Fitch lowered its ratings outlook from Stable to Negative. In foreign currency trading, assurances by the European Central Bank that no rates cuts were in the offering helped the euro end up 1.56% on Friday to a Bank of Israel rate of 4.3115 shekels. (Ruti Levy)