The Ticker / Greek Deal Sets Off Rally in Tel Aviv

Initial generic Copaxone sales look bad for Teva; TASE members battle over share allocation; Israelis trek to Austin in bid for underwriting business.

Reuters

The Tel Aviv Stock Exchange joined world markets yesterday to celebrate the agreement between euro zone leaders and Greece to move forward with a bailout loan for the country to avert bankruptcy.

“The markets can breathe a sigh of relief and assume that the Greek story is behind them and focus on Europe’s recovery, said Avihai Shoretzki of IBI Israel Brokerage *& Investments. Bank shares led the rise as the benchmark TA-235 index climbed 1.2% to a close of 1,680.99 points, while the TA-100 added 1.1% to 1,444.94, on turnover just short of 1.5 billion shekels ($400 million).

The bond market didn’t join the rally, with the government’s 10-year shekel bond falling 0.77% to raise its yield to 2.6%. Bank Hapoalim ended 3.2% higher at 21.28 shekels and Bank Leumi gained 2.5% to 16.38. Bezeq was down 2% at close at 6.56 shekels, but Partner surged 4.2% higher to 10.67, making it with top gainer among TA-100 stocks. Cellcom, which said yesterday it was buying its tiny rival Home Cellular, rose 3.6% to close at 14.75. Israel Chemicals finished 3.7% up at 26.34 shekels.

Initial generic Copaxone saleslook bad for Teva

The first week of sales for the new generic version of Teva Pharmaceuticals’ Copaxone multiple sclerosis treatment are already a cause for concern for the Israeli drug maker. Copaxone is Teva’s biggest money maker, accounting for 47% of operating profit in the first quarter, but with the new Sandoz/Momenta generic Glatopa making its debt last week, Copaxone quickly lost market share.

The two versions of the Teva MS drug saw their combined market share for new prescription drop to 53.7% from 65.3%. The only good news was the new Coapxone, which requires fewer weekly injections and its Teva’s best defense against a generic incursion, saw its share of Copaxone sales climb. Bernstein analyst Ronny Gal said Teva is likely giving discounts to users of its new Copaxone and said first-week figures may be overstating the how much of a threat Glatopa will be in the long term. Teva shares closed 1% higher on Monday at 235.20 shekels.

TASE members battle over share allocation

The 26 members of the Tel Aviv Stock Exchange are fighting over who will get how much stock when the bourse transitions into a limited liability company. The showdown will come at the end of the month when members get to vote.

One proposal, formulated by the accounting firm Ernst & Young, would be based on each member’s contribution to trading volume and bourse income over the last decade. That would give the TASE’s bank members 79% of the shares, First International Bank being the biggest with 24,.6%. But broker members, led by IBI Israel Brokerage & Investments, opposes the E&Y formula, saying it understates their contribution to the TASE and, for instance, doesn’t take into account trading in exchange traded notes. IBI says all members should be given a 3.85% of the shares in the TASE, a move that would give foreign banks a sizable 27% stake.

Israelis trek to Austin in bid for underwriting business

Israeli underwriters trekked all the way to Austin, Texas, at the end of June in the hopes of winning the job of raising between $100 million and $150 million of bonds for the World Class Capital Group. Among those that made the trip to meet with WCCG’s Nate Paul were Rafi Lipa and Gal Amit, who have been responsible for most of the U.S. property companies raising debt in Tel Aviv.

Clal Underwriting, leader Underwriting and Leumi Partners also sent executives. Unlike most of the U.S. developers raising money in Israel, WCCG is not a New York-based company. Its portfolio of office buildings, malls, dormitories, hotels and warehouses are located in 16 U.S. states. Among others planning Israeli bond sales, Wharton Properties is likely to be the biggest, with an issue of up to $500 million. Copperline Partners is looking to issue $100 million as is Urban Group, a Toronto company, and ECI.