Bank of Israel slashes 2016 forex purchasing program
The Bank of Israel said Thursday it expects to buy just $1.8 billion in foreign currency next year to offset the effects of the country’s growing output of natural gas on the balance of payments. That marks a big decline from $3.1 billion this year and $2.1 billion in 2014. But the central bank said that with a sharp drop in global energy prices the impact of energy on the balance of payments is now much smaller. The central bank began buying foreign currency in 2013 as the Tamar gas field went into production to offset the effect domestic energy production would have on Israel’s imports of oil and coal. The bank reiterated its policy of intervening from time to time in the forex market to defend the shekel “in situations of exchange rate fluctuations that are not in line with fundamental economic conditions or when the foreign exchange market is disorderly.” (TheMarker Staff)
Frutarom shares rally on earnings gain
Frutarom shares rallied in Tel Aviv Stock Exchange trading yesterday after the maker of flavors and fragrances reported net profit rose 48% from a year earlier in the third quarter. Net was $30.9 million, or 52 cents a share, not counting one-time factors, up from $24.4 million, or 35 cents, the same time in 2014. Since the beginning of 2015 Frutarom has made 11 acquisitions, three of them since the beginning of the third quarter, which helped boost revenue 11.3% to 234.5 million in the quarter. Frutarom said a stronger U.S. dollar against the principal currencies the company operates in reduced revenue by 14.6%. The company said it is taking steps to integrate the research and development, sales, operations and production platforms and merge that will lead to operational savings of over $12 million annually. Shares of Frutarom rose 5.7% to close at 175 shekels ($45.11). (TheMarker Staff)
Back-to-back terror attacks trim share gains in Tel Aviv
Tel Aviv shares pulled back from early gains yesterday after two terror attacks in Tel Aviv and the West Bank. The benchmark TA-25 index ended up 0.3% at 1,573.66 points while the TA-100 ended virtually unchanged at 1,360.49 in a day dominated by corporate earnings (see stories on this page and page 16). Turnover reached 1.45 billion shekels ($370 million). Teva Pharmaceuticals finished 2.2% higher at 237.80 shekels. Gilat jumped 7.9% to close at 13.41 shekels after it reported that it had signed a long-term strategic partnership for the development of satellite communications with China Railway Rolling Stock Corporation. Avgol rose 5.2% to 3.80 on strong third-quarter earnings as did Oil Refineries Limited, which advanced 2.4% to close at 1.56 shekels. Delek Auto eked out an 0.5% rise to 36.31 shekels even though it reported a 79% drop in quarterly profit to 56 million shekels. Aloin Blue Square finished 6.1% higher at 1.29 shekels. The dollar lost close to 0.5% against the shekel to a Bank of Israel rate of 3.8850. The euro was unchanged at 4.1627. (Eran Azran).