The Ticker: Cofix Weighing Return to 5-shekel Coffee After Sharp Quarterly Sales Decline

Eurocom Real Estate comes under new pressure from creditors; Flug gets top grade on Global Finance magazine’s central banker ratings; New North Korea jitters send Tel Aviv stocks lower

An employee prepares a glass of juice inside a Cofix branch in Herzliya Pituach, north of Tel Aviv, December 12, 2016.
Ariel Jerozolimski/Bloomberg

Cofix weighing return to 5-shekel coffee after sharp quarterly sales decline

Cofix, the chain of one-low-price coffee and groceries, is weighing restoring its original five-shekel ($1.40) price after a controversial boost to six shekels earlier this year, Yaki Vadmoni, its new CEO, told TheMarker on Sunday. “We’re looking into this. The decline in sales despite the higher price points to a problem that we need to solve – we can’t ignore it,” he said. “I’m consulting with the most experienced people in the industry and hearing what they have to to say.” Vadmoni spoke after Cofix reported over the weekend that revenues plunged 29% year on year in the second quarter to 74 million shekels, which left it with an operating loss of 63,000 shekels and a net profit of just 152,000. “Cofix is like a startup company and you have to give it room to breathe. This is just the first chapter in the Cofix story,” he said. Cofix shares ended down 2.4% at 9.30 shekels. (Adi Dovrat-Meseritz)

Apollo Capital, Miki Dayan boost ADO stake to 37% in struggle for control

Real estate investor Miki Dayan and the U.S. private equity fund Apollo have amassed a 36.9% stake in the property company ADO after buying a combined 1.48 million shares on Thursday. The move comes as the two engage in a struggle with Housing & Construction Ltd. for control of ADO that has sent ADO shares soaring. Apollo acquired another 700,000 shares, or 2.5%, of ADO at 74.66 shekels ($20.88) each, raising its holding to 14.72%. Dayan, meanwhile, bought 780,000 shares, or 2.8%, at 73.84 to bringing his stake to 22.1%. That puts them neck-and-neck with Housing & Construction’s 40.1% holding. Another 12.2% of ADO stock changed hands on Thursday, signaling that outside investors are betting on the price rising as the two groups compete for the property developer by offering even higher prices for the shares. Apollo executives are due in Israel Monday to meet with Housing & Construction representatives in a bid for cooperation. Shares of ADO finished up 3.9% on Sunday at 65.50 shekels. (Yoram Gabison)

Eurocom Real Estate comes under new pressure from creditors

Eurocom Real Estate’s creditors sent out a letter late last week warning the company, which is controlled by embattled telecoms tycoon Shaul Elovitch, that it wasn’t meeting the terms of its loan agreements. The letter warned Eurocom Real Estate, which owes them 264 million shekels ($73.8 million) not to move assets out of the company and ensure proceeds from any assets sales remain in the company without approval from the lenders. The warning comes at a sensitive time for Elovitch, who is facing a securities probe for his dealings with Bezeq, which is controlled by Eurocom Real Estate’s sister company Eurocom, and pressure from other creditors as the value of his corporate pyramid plunges. While Mizrahi Tefahot was once Eurocom Real Estate’s biggest creditor, the debt has since been paid down to just 8 million shekels. The hard line is reportedly being led by another lender, Clal Insurance, which is now the single biggest creditor. (Michael Rochvarger)

Flug gets top grade on Global Finance magazine’s central banker ratings

Bank of Israel Governor Karnit Flug was one of nine global central bankers to earn an A in a report card on policymakers issued by Global Finance magazine last week. Published annually since 1994, the magazine rates the central bank governors of 83 key countries and the European Union. In addition to Israel, top honors were shared by the central banks of Australia, Honduras, Lebanon, Morocco, Paraguay, Russia, Taiwan and the United States. Next door Jordan got an A-minus grade. “Central bankers are entering a tightening phase, trying to pull back from quantitative easing and let their economies have more free rein, but it is no easy task to turn around the ship of state finance,” said publisher and editorial director Joseph Giarraputo. Flug has kept Israel’s base lending rates at a record low 0.1% since early 2015 and analysts say she is being forced to push back the date for the inevitable hike amid unexpectedly low inflation. (Hagai Amit)

New North Korea jitters send Tel Aviv stocks lower

Tel Aviv shares ended sharply lower on Sunday after North Korea conducted its sixth and most powerful nuclear test, which it said was an advanced hydrogen bomb for a long-range missile. The move marked a dramatic escalation of the regime’s stand-off with the United States and its allies and sent both the TA-35 and TA-125 indices down about 1.2% to 1,383.91 and 1,256.30 points, respectively. Turnover was 615.5 million shekels ($172 million). Mazor Robotics was the volume leader of the day, dropping 4.8% to 82.0 after a two-day rally last week set off by Medtronics’ investing $40 million in the company. Teva Pharmaceuticals lost 2.7% to 56.49, but Coplant soared 12.6% to 34 agorot after it said it was in talks with a U.S. investor to put $5 million into the company at a 50 million-shekel valuation. Delek Grooup declined 1.4% to 678 even after Leader Capital Markets set a 916-shekel target price for the stock. (Omri Zerachovitz)