Tel Aviv Shares Take a Tumble After Wall Street Rout on Friday

Business in Brief: Standard & Poor’s puts Teva debt on Negative Outlook ■ Internet Gold planning 250 million shekel bond issue ■ Housing & Development wins $309 million Uganda airport-construction contract

The Tel Aviv Stock Exchange (TASE) building in Tel Aviv.
Bloomberg

Tel Aviv shares take a tumble after Wall Street rout on Friday

Tel Aviv shares tumbled on Sunday after Wall Street’s three major indexes logged their biggest weekly losses in two years on Friday. The benchmark TA-35 index lost 1.8% to end at 1,512.84 points, while the TA-125 dropped 1.9% to 1,376.82, on turnover of 706.6 million shekels ($205 million). The New York selloff came amid worries that a tightening job market will ignite inflation and a surge in bond yields that sent investors fleeing equities. But Ori Greenfeld, of  Psagot, said he wasn’t concerned about a long-term repricing of stocks. “If it happens, it will be a sharp correction, but only a correction and not a change of direction [for the market],” he said in a comment released on Sunday. Only four TA-125 shares ended the session higher. Frutarom said it purchased Israeli Biotechnology, a maker of natural active ingredients for the cosmetics and dietary supplements, for $21 million. Frutarom ended down 0.4% at 348.50. (Guy Erez)

Standard & Poor’s puts Teva debt on Negative outlook

Standard & Poor’s said on Friday that Teva Pharmaceuticals debt had a Negative outlook, despite a cash infusion of $1.4 billion last week. “The CreditWatch reflects our belief that further downward revisions to our 2018 expectations are likely, as well as our view that Teva’s business is more volatile and difficult to predict than we previously believed,” said S&P, which rates Teva BBB-minus. A day earlier Teva completed the sale of its remaining women’s health assets for $703 million and settled an arbitration dispute with Allergan for $700 million, which will go to repaying debt.  However, Teva also agreed to covenants with creditors that will enable it to increase its ratio of debt to earnings before interest, taxes, depreciation and amortization from five times to 5.9 times in the 2018 third and fourth quarters, S&P noted. Moody’s and Fitch’s lowered their Teva ratings in January and November, respectively. Teva shares ended down 2.9% at 70.10 shekels ($20.31). (Yoram Gabison)

Internet Gold planning 250 million shekel bond issue

Internet Gold plans to sell 250 million shekels ($72.4 million) of bonds in the coming weeks in a step aimed at removing a tier in the Elovitch group corporate pyramid and put it in line with the Business Concentration Law. Under the law, companies are not counted as a tier in a pyramid if their securities are not publicly traded on the Tel Aviv Stock Exchange. Shaul Elovitch, the embattled controlling shareholder of the group, aims to delist Internet Gold from the TASE (although it would continue to trade to Wall Street) and remove its bonds from public trading. The new bonds, which will be sold to institutions and not be publicly traded, will reduce Internet Gold’s public traded debt by 30%. The issue will be an extension of its A3-rated Series Heh bonds due in 2025. Shares of Internet Gold, which holds 65% of B Communications, which in turn holds 25% of Bezeq, ended down 2.7% at 29.07 shekels. (Michael Rochvarger) 

Housing & Development wins $309 million Uganda airport-construction contract

Housing & Development Limited, the building company controlled by Shari Arison, said on Sunday it won a $309 million contract to build an airport in Uganda. The new facility will be developed by the company’s SBI overseas unit close to the city of Hoima and Lake Albert in the country’s northwest, where it will help support the area’s growing petroleum industry, Housing & Development said. The three-year project is being financed by the British export credit insurance company UK Export Finance and an unnamed commercial bank, it said. SBI accounted for 45% of the company’s 13.3 billion shekels ($3.85 billion) orders backlog as of the end of last September. The contract will help SBI’s reduce its reliance on its troubled Nigerian business, where profits have plunged to 62 million shekels in the first nine months of 2017 from 471 million in full-year 2013. Housing & Development shares ended down 1.2% at 8.27 shekels. (Yoram Gabison)