The Ticker: Defense Minister Netanyahu Gives Nod to Privatization of Israel Aerospace Industries

Bank of Israel monetary panel voted 4-1 for first rate hike in seven years ■ Regulators conclude that Elsztain is no longer controlling shareholder of Super-Sol

Israeli Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting at the Prime Minister's office in Jerusalem on December 9, 2018.

Defense Minister Netanyahu gives nod to privatization of Israel Aerospace Industries

The long-waited privatization of Israel Aerospace Industries is moving ahead after Benjamin Netanyahu, in his role as defense minister, quietly gave the go-ahead in the last several days. The plans had been opposed by Netanyahu’s predecessor at the post, Avigdor Lieberman, over concerns that going public would inevitably lead to classified national security information leaking out.

Under the plan, a stake of between 25% and 30% of IAI will be floated on the Tel Aviv Stock Exchange. The higher figure would give the stock a place in the TASE’s TA-35 index on blue chip; over 25% would entitle it to inclusion in the broader TA-125.

IAI estimates its value at $4 billion, but the company posted a $19 million third-quarter loss and has been struggling in recent years with sluggish revenue growth. In any case, the state-owned arms maker will be required to get an independent valuation before it can go ahead with the IPO. (Hagai Amit)

Bank of Israel monetary panel voted 4-1 for first rate hike in seven years

The Bank of Israel’s monetary committee wasn’t unanimous when it decided November 26to raise interest rates for the first time since 2011. Minutes from the meeting released on Monday showed members voted 4-1 to raise rate to 0.25% from 0.1%.

The rate hike was unusual not only because it was the first in seven years but because it was done after Karnit Flug had stepped down as governor and Amir Yaron had not yet taken over. However, the minutes showed that the committee concluded that Israel’s macro environment required immediate action.

“They assessed that the economic considerations are the decisive factors in reaching the interest rate decision, and not the fact that the Bank is in a period of transition between governors,” the minutes said. The one member who opposed the hike countered that the situation was “borderline” and felt that the move should be led by the new governor, the minutes showed. (Avi Waksman)

Regulators conclude that Elsztain is no longer controlling shareholder of Super-Sol

The Israel Securities Authority has concluded that the Argentinian real estate magnate Eduardo Elsztain no longer controls the supermarket chain Super-Sol through his Discount Investment Corporation.

Elsztain’s holding company had reduced its stake in Super-Sol in the second quarter from 50.2%to 33.6% and reported a 1.28 billion shekel ($340 million) capital gain from the sale – money it needed to repay debt but could only add to its balance sheet if indeed it was no longer a controlling shareholder.

However, a boardroom battle last June that led to the exit of Super-Sol Chairman Israel Berman had raised questions about whether Elsztain still effectively remained in control. In reaching its conclusion, the ISA noted that Discount had reduced its stake further to 26% last month and that the institutional investors who had bought its shares now had two seats on Super-Sol’s board. The decision clears the way for the approval of a shelf prospectus Super-Sol has sought. (Yoram Gabison)

Tel Aviv joins global stock market declines on U.S.-China trade worries

The Tel Aviv Stock Exchange joined a decline in global stocks on Monday as fresh signs emerged that the U.S.-China trade spat was taking a deeper toll on world economic growth.

The TA-35 and TA-125 indices both finished the day down more than 0.7% at 1,579.97 and 1,430.49 points, respectively, on turnover of 1.26 billion shekels ($340 million). Insurance stocks were sharply lower, with Clal losing 3.7% to 59.90 shekels, Phoenix down 2.8% to 21.24 and Migdal down 2.7% to 4. Mivtah Shamir fell 0.8% to 66.88.

The holding company said it would invest in a $450 million natural gas-fired power plant being developed by Kesem Energy. Tamar Petroleum ended 0.2% lower at 16.32.

A suit filed Monday claims the company’s decision of raise royalties paid to Delek Energy was improper. Cellcom Israel said Monday it had raised 384 million shekels in debentures – 187 million at 3.7% and 213 million at 4.34%. (Michael Rochvarger)