WeWork Slates U.S. Roadshow Ahead of Bond Placement in Israel

Business in Brief: Super-Sol mulls putting day spas in its newly acquired New Pharm stores ■ Psagot: Bank of Israel intervention won't stop strengthening shekel ■ My Size shares experience another unexplained rally ■ TA-35 index cedes early gains to end session almost unchanged

Meeting in WeWork at 401 Park Avenue South, New York.
WeWork

Super-Sol mulls putting day spas in its newly acquired New Pharm stores

Super-Sol is mulling a plan to place day spas inside many of the 62 New Pharm stores the supermarket chain has acquired, offering services such as Botox injections and laser hair removal at lower prices than are generally available, TheMarker has learned. Super-Sol, Israel’s biggest food retailer, completed its 128 million shekel ($37.3 million) acquisition of New Pharm last month and is preparing to challenge the market dominance of Super Pharm, which with 220 stores is by far Israel’s biggest drugstore chain. Super-Sol hopes the low-cost treatments will enhance New Pharm’s reputation as a cheaper alternative to Super Pharm for all products and services. Also, because 70% of the products carried by Super-Sol and New Pharm are identical, Super-Sol can free up space at New Pharm outlets with losing sales. Against that, however, Super-Sol will be taking on the legal risk that comes when beauty treatments fail, or harm the client. Moreover, Super Pharm is looking to cut costs and prices, saying it was cutting the number of cosmetic reps on shop floors by 10%. (Adi Dovrat-Meseritz)

Psagot: Bank of Israel intervention won’t stop strengthening shekel

The Bank of Israel intervened last week in the currency market for the first time in months to stem a further appreciation of the shekel against the dollar, but economists at Psagot Investment House doubt the central bank can stem further strengthening of the currency. While the interest rate spread between Israel’s base rate (0.1%) and the U.S. equivalent (1.25% to 1.5%) favors a stronger dollar, there aren’t enough foreign holders of Israeli bonds to convert their holdings into dollars and influence the exchange.  Israeli investors are hesitant to move into dollars, fearing their profits will be swallowed up by a strengthening shekel. Meanwhile, Israel’s economic fundamentals point to a stronger shekel. “There’s a big surplus in the current account of almost 3%, exports are improving and the start of natural gas exports will only exacerbate the trend,” said Psagot chief economist Ori Greenfeld, adding: “It’s impossible [for the central bank] to fight these trends.” (Guy Erez) 

WeWork slates U.S. roadshow ahead of bond placement in Israel

WeWork, the shared-office company founded by Israeli Adam Neurmann and American Miguel McKelvey, has invited a group of Israel institutional investors to the United States for a firsthand view of its business ahead of a $500 million private placement of bonds on the Tel Aviv Stock Exchange. The roadshow will take place January 16-17, mainly in New York. The offering is expected to take place within a few months and to receive an A credit rating. Founded in 2010, WeWork is expanding rapidly, which means it is generating few if any profits, and it needs the cash to continue at its current pace. It’s also expanding the concept to WeLive, a network of furnished apartments available on a monthly basis. The company is also planning an initial public offering later, probably in the United States. Discount Capital Underwriting, a unit of Israel Discount Bank, is leading the planned bond issue. (Michael Rochvarger)  

My Size shares experience another unexplained rally

My Size, the developer of apps for measuring clothing, has seen another unexplained episode of sharp rises in its share price. Following a rally on Wall Street Friday, shares of My Size soared 74% to 5.47 shekels ($1.59) on the Tel Aviv Stock Exchange Sunday, bringing its gain so far in 2018 to 150%. The jump follows a warning by the Nasdaq Stock Market that it was considering removing the stock from trading, among other reasons because its market cap was below $35 million. My Size appealed the decision and in the meantime its market cap has risen to over $32 million. The latest run-up isn’t the first for the company, which began trading on the TASE in 2014 through a merger with a publicly traded shelf company and had a market cap as high as 311 million shekels before it fell to as low as 44 million shekels at the end of 2017. (Shelly Appelberg)

TA-35 index cedes early gains to end session almost unchanged

The TA-35 index got off to a strong start Sunday, but ended up ceding most of the gains over the course of the day to end almost unchanged. The benchmark index finished up just 0.07% at 1,536.92 points, while the broader TA-125 index added nearly 0.3% to 1,396.49, on relatively heavy turnover of 919 million shekels ($268 million). Tech and insurance shares led gains. In tech shares, Biotime advanced 6.8% to 8.88, LivePerson rose 6.3% to 42.50; and Mazor Robotics gained 4.3% to 99.65. Insurers’ gains were paced by rises of 2.6% of Clal to 65.57 and 2.3% for Harel to 27.27. Teva Pharmaceuticals fell 1.15% to 65.20 after Wells Fargo downgraded the stock from Market Perform to Underperform even as it raised its Wall Street price target from $12 to $17. Bezeq lost 1.55% to 5.45 after Leumi Capital Markets lowered its shares to Market Perform and the target price by 20 agorot to 6 shekels. (Shelly Appelberg)