The Ticker / Bank of Israel Likely to Intervene as Shekel Gains

Plus500 unfreezes most customer accounts after review; Emerson to buy Spectronix for $79 million; Tel Aviv shares rise as Greek crisis fades.

shekels
Reuters

The dollar weakened sharply against the shekel on Tuesday, completing a drop of 5% in the last three months and prompting speculation the Bank of Israel would to intervene to stem the Israeli currency’s strength. The greenback lost 0.8% on Tuesday to a Bank of Israel rate of 3.7690 shekels while the euro, which fell 0.6% on Monday amid worries about Greece, was down a more modest 0.17% to 4.2194. Yossi Fraiman, CEO Prico Risk Management, said downward pressure on the dollar was growing because exporters need to trade in the dollars they earned for shekels to meet salaries and other expenses early in July. “The Bank of Israel will be forced to buy $500 million at least in the coming week,” Fraiman said. He termed a drop to 3.74-shekels “critical” from the central bank’s perspective because speculators could then easily trade it down to below 3.70. (Eran Azran)

Plus500 unfreezes most customer accounts after review
Plus500, the embattled Israeli financial trading platform, said on Tuesday it had unfrozen the great majority of its trading accounts after reviewing them for compliance with UK Financial Conduct Authority guidelines. The company said 9,758 of its 13,499 accounts had resumed trading, although 5,261 of those were asked to make additional funding deposits. The rest cashed out. Plus550 shares plunged in May after it froze client accounts to ensure they met FCA requirements for assuring they weren’t being used for money laundering, in turn prompting an offer by Teddy Sagi’s Playtech to buy the company. Freezing accounts came at a cost to Plus500’s revenues, which the company reported on Tuesday fell to $43 million in the second quarter, down from $45.5 million a year earlier. Plus500 shares rose 2.4% to 399 pence ($6.27) on the London Stock Exchange. ()

Emerson to buy Spectronix for $79 million
Spectronix, the maker of fire-detection systems, is being sold to Emerson Electronics of the United States for $79 million, ending its 33-year presence on the Tel Aviv Stock Exchange. The company said Emerson would be paying $79 million, but shareholders would receive a $20 million dividend before the sale is completed, effectively making their payout from the sale work out to $11.67 a share, a 30% premium on Spectronix’s TASE share price before the acquisition was announced. On Tuesday it closed at 41.91 shekels ($11.12), up more than 24% in the past two days. Spectronix makes fire control systems for armored vehicles for military clients like the U.S. and Israeli armies as well as gas and fire detection gear for the chemicals and energy industries. The company employs 200 people and posted $41.1 million in sales in the 12 months through March, earning $2.6 million.

Tel Aviv shares rise as Greek crisis fades
The Tel Aviv Stock Exchange ended higher for the first time in seven sessions as the cloud of the Greek financial crisis appeared to be lifting. The TA-25 index started lower but gathered strength after Athens submitted a new two-year aid proposal to its creditors in a bid to resolve its impasse with lenders. The benchmark index ended up 0.45% at 1,648.80 points, while the TA-100 added 0.4% to 1,418.31, on turnover of 1.43 billion shekels ($380 million). Frutarom led TA-100 stocks higher, advancing 4.8% to 158.30, after it announced a small acquisition. Bank shares rebounded, with Hapoalim ending up 1.6% at 20.33 shekels. But energy shares were down after the government released terms regarding the gas cartel. Ratio lost 2.4% to 38 agorot and Delek Drilling 1.7% to 16.70 shekels. The government’s 10-year shekel bond rose 0.37% to lower its yield to 2.61%.