The Ticker: Security Regulators Cracking Down

Israel Chemicals shares fall on expectations Canadian company will sell stake; Hamat in talks to buy ceramics maker HeziBank for up to 10 million shekels; Energy shares decline after reports of imminent arrest of industry figures

Shmuel Hauser, chairman of Israeli Securities Authority, third from right, Tel Aviv, Sep 8, 2014.
Ariel Jerozolimski/Bloomberg

Security regulators cracking down

Securities regulators have taken a tougher stance against violations in recent years, doubling the number of criminal and administrative investigations to about 10 each annually, Shmuel Hauser, the chairman of the Israeli Securities Authority, told a Tel Aviv conference on Sunday The ISA has also been imposing more severe penalties, including 350 million shekels ($100 million) in fines collected over the last five years, he said. “I believe the capital market is cleaner than in the past and we will continue with our efforts to clean it up and win the trust of the public, which is the heart and soul of an efficient market,” he said. Hauser denied that he ever came under pressure to refrain from opening probes against powerful concerns or about the way they are managed. “We need to appreciate the fact that there is no problem investigating any violation by any person, no matter how senior he is,” Hauser said. (Shelly Appelberg and Jasmin Gueta)

Israel Chemicals shares fall on expectations Canadian company will sell stake

Shares of Israel Chemicals dived on Sunday in the face of expectations that Potash Corporation of Saskatchewan will be selling its 14% stake in the company in order to win antitrust approvals for its merger with Agrium. PCS said on Friday that it and Agrium had been told separately by China’s Commerce Ministry and the Competition Commission of India that they would only clear the merger on condition that PCS sell “offshore minority ownership interests,” which include 14% of ICL as well as 28% of Jordan Arab Potash Company among others. PCS bought 9% of ICL in 1998 and between 2005 and 2010 increased the holding to 13.77% before Yair Lapid, finance minister at the time, blocked a bid for control the Canadian company mounted in 2012. The sale of PCS’ shares, which are worth about 2.7 billion shekels ($770 million), will flood the market with ICL stock. ICL shares ended down 6.2% at 14.35 shekels. (Yoram Gabison)

Hamat in talks to buy ceramics maker HeziBank for up to 10 million shekels

Hamat, the maker of faucets and plumbing fixtures, said on Sunday it was in talks to buy 80-100% of ceramic tile maker HeziBank for as much as 100 million shekels ($28.5 million). Although Hamat said the talks were advanced, “wide business differences exists between the parties and there is no certainty that negotiations will lead to a binding agreement or what its conditions will be if it is signed.” Under the terms being discussed Hezi Bank, who founded the firm with his wife Margalit 50 years ago, would stay on as CEO for three to five years. The company has annual revenues of about 150 million shekels and earnings before interest, taxes, depreciation and amortization of about 20 million. Hamat, which operates through four subsidiaries that make and market porcelain and plastic fixtures and plumbing products, has ridden the wave of the Israeli building boom in recent years. It was acquired by Yoav Golan in 2011 for 310 million shekels and in the years since has paid 200 million in dividends. Hamat shares ended unchanged at 13 shekels. (Eran Azran)

Energy shares decline after reports of imminent arrest of industry figures

Tel Aviv shares ended lower on Sunday after a news report over the weekend saying that the submarines affair probe was widening to include publicly traded energy companies. Channel 2 news said police were readying for a wave of arrests, sending the Oil and Gas index down 1.6% to 986.73 points. The blue chip TA-35 index lost 0.2% to end at 1,384.87 points while the TA-125 fell 0.15% to 1,258.69, on turnover of 607 million shekels ($173 million). Among the big losers, Mylan declined 2.4% to 113.20 shekels after the U.S. Food and Drug Administration described “significant violations of current good manufacturing practice” in a warning letter to a Pfizer unit that manufactures Mylan’s EpiPen treatment. Teva Pharmaceuticals ended down 2% at 54.49. Compugen led TA-125 gainers, jumping 9.3% to 11.25. In foreign currency trading on Friday, the dollar extended losses against the shekel, weakening nearly 0.7% to a Bank of Israel rate of 3.504 shekels. (Omri Zerachovitz)