The Ticker: Israeli Banks Get Good Marks From Moody’s

Nestle’s buyout of Osem seen completed next week; TASE gains slightly, as trading day ends early.

The Bank Leumi logo on the front of the company's headquarters in Tel Aviv, November 9, 2010.

Israeli banks get good marks from Moody’s 

Israel’s banks are stable despite their high exposure to mortgage loans, stated the ratings agency Moody’s on Wednesday. It is leaving Israel’s banking sector’s credit rating stable, it added, based on the presumption that the sector will continue to have flexible operating conditions, as the banks’ capital reserves keep growing and liquidity is high. Moody’s said it believes the banks’ bad loans will remain at 2.5% of their loan portfolio, due to low unemployment, low interest rates, and decreasing leverage at some of Israel’s largest corporations. The rating agency also believes the banks will approach a core capital adequacy ratio of 10%, in keeping with the banks supervisor’s new requirement. “Despite the Israeli banks’ high exposure to mortgage lending and to the real estate sector as a whole (45% of the banks’ credit portfolio as of September 2015), which makes them more vulnerable when a potential correction to home prices comes (after increases of 100% since 2007), this risk is balanced by the higher down payments required of mortgage borrowers and by regulatory demands — alongside Israeli households’ financial wellbeing,” stated the agency. (Michael Recharger)

Nestle’s buyout of Osem seen completed next week

Nestle’s acquisition of Israel’s largest listed foodmaker Osem Investments is expected to be completed on April 20, Osem said yesterday. The completion of the deal on this date is contingent on receiving the merger certificate on April 17, as is currently expected, Osem said in a statement to the Tel Aviv Stock Exchange. Nestle in February offered 3.3 billion shekels ($871.5 million), or 82.5 shekels per share, for the Osem shares it does not own in a deal valuing the company at 9.13 billion shekels. The Swiss food giant already owns 63.7% of the company, while institutions hold 7%. (Reuters) 

TASE gains slightly, as trading day ends early

The Tel Aviv Stock Exchange closed yesterday’s trading session with gains, as the blue-chip Tel Aviv-25 index closed up 0.5%, at 1,474 points, and the broader Tel Aviv-100 Index gained 0.4%, to close at 1,273 points. Real estate shares gained 0.2%, insurance shares gained 0.3%, and communications shares gained 0.5%. Meanwhile, banks shares dropped 0.5%, and biomed shares dropped 0.8%. Due to an error, continuous trade in bonds ended at 4:55 P.M. yesterday, instead of at 5:15 P.M. Trade was cut short because today had originally been scheduled as the day when bond indexes are updated, and the exchange’s policy is to end open trade early in order to give exchange-traded funds more time to balance out their portfolios. The update was postponed by a few weeks, but the TASE computer systems were not updated accordingly. (Ruti Levy)