TA-100 companies leaves Israeli investors’ exposed abroad | Local tech firm Vonetize pulls Tel Aviv IPO | Tech, property pace gains for Tel Aviv shares.
Six years after a class action suit was launched against it for failing to downgrade bonds connected with Lehman Brothers, the Israeli bond rating agency Maalot S&P on Sunday reached a settlement to pay investors 8 million shekels ($2.1million).
The small sum approved by Tel Aviv District Court, was a fraction of the approximately 300 million in damages originally sought, but that was due to the fact that in the meantime trustees for the failed U.S. investment bank paid out significant claims.
The suit was filed by investors who held bonds by an Excellence investment house unit called World Currencies and by Keshet Bonds, both of which were backed by Lehman. In the suit, plaintiffs said S&P Maalot failed to lower its rating on the bonds until after Lehman collapsed. S&P Maalot defended its actions by saying it acted like other rating agencies at the time and said Lehman’s demise came as a surprise. (Jasmin Gueta)
TA-100 companies add significantly to Israeli investors’ overseas exposure
Israeli investors have greater exposure to overseas stock markets than they think, an important fact to consider at a time when Brexit fears are weighing on global stock markets, research published by the Bank of Israel on Sunday found.
While Israelis held about 269 billion shekels ($69.3 billion) in foreign shares at the end of 2015, or about 8.1% of their total financial assets, they held another 14.9% in shares belonging to the Tel Aviv Stock Exchange’s TA-100 index that also exposed them to overseas markets. Bank of Israel economists said that is because more than 53% of the sales non-financial TA-100 companies are generated abroad and those companies are far more sensitive to changes in overseas stock markets than companies that sell only to Israel.
This indirect equity exposure, central bank economists said, increases the public’s exposure to foreign equity markets by 40%. For institutional investors, it increases their exposure 15%, they added. (Shelly Appelberg)
Vonetize pulls Tel Aviv initial public offering
Vonetize, a small high-tech company of the kind the Tel Aviv Stock Exchange has hoped to attract, pulled an initial public offering at the end of last week, although it promises it will try again. The company, a maker of video-on-demand services, had cut the size of the offering to 31 million shekels ($8 million) from 58 million while slashing the value of the company by almost 60% to 119 million, but Vonetize said on Thursday it failed to enlist enough institutional investors to complete the offering.
“There was a technical problem in processing all the orders that were committed in the [share] auction,” said CEO Noam Josephides. “We plan a new auction in another week to fix the problem and compete it as planned.” However, market sources said the valuation for the company was excessive considering its revenues amounted to just $1.9 million last year, leaving it with an operating loss of $2.9 million. (Shelly Appelberg)
Tech, property pace gains for Tel Aviv shares
Tel Aviv shares ended sharply higher for a second session on Sunday, powered by tech and real companies. The TA-25 and TA-100 indices both ended the day up 1.37% at 1,431.80 and 1,245.29 points, respectively, in typically light Sunday turnover of 530 million shekels ($136.5 million).
SodaStream topped gainers on the TA-100, adding 7.4% to 90 shekels, tracking gains in New York over the weekend, but tech companies were the outstanding performers of the day, led by Mazor Robotics, which advanced 5.3% to 39.74 after Standpoint Research initiated coverage of the stock with a Buy. Gilat rose 5.25% to 16.64 while SpaceCom rose 4.6% to 35.70 after it said it won a $63 million government contract. LivePerson, which spiked Thursday on a Buy recommendation, pulled back 2.6% to 26.90, making it the biggest loser on the TA-100 for the day. Elbit Systems finished up 1.4% to 367 shekels after it won a $19 million homeland-security contract from Uruguay. (Uri Tomer)
Gidi Orsher earns culture minister's wrath with reviling stereotypical post.
Army Radio’s film critic Gidi Orsher has been suspended pending a hearing for posting comments reviling Mizrahim on his Facebook page on Saturday. Culture and Sports Minister Miri Regev called for his outright dismissal.
Among his comments, Orsher said, directing his statements at Israelis of Mizrahi, or Middle Eastern origin: “Next time you have a heart attack, skip catheterization and use your grandmother’s remedy of putting a chicken leg on your head instead.” The next time there is a rocket attack, Mizrahim should “ignore the Iron Dome and recite Psalms or perhaps wait for the matriarch Rachel to protect you.” Mizrahim who have trouble conceiving, he said, should “continue the practice of praying for fertility at the graves of dead rabbis in the Galilee.”
Orsher also wrote: “And next time you want to publish your thoughts, leave the computer with its programs and applications developed by Israeli startups, and go back to writing on parchment, sending messages with bonfires and responding hysterically to the media (that, you do already).”
Army Radio commander Yaron Dekel suspended Orsher pending a hearing that will be held early next week.
Regev said: “Suspension is not enough. I demand that Orsher not set foot in a public station funded by public money. He and those like him must know that racism against Mizrahi communities has a heavy cost. Only then will we put an end to racism that leads to exclusion, discrimination and deprivation.
Regev said she had spoken to Defense Minister Avigdor Lieberman and had asked him “to begin the social justice revolution” at Army Radio that "Bogie was afraid to do,” referring to the former defense minister, Moshe Ya’alon, by his nickname.
Prime Minister Benjamin Netanyahu said of Orsher’s post that “a man with such ignorant views has no place in public broadcasting in Israel.”
Among the politicians across the board expressing outrage at Orsher’s post, Lieberman said Orsher’s comments could not be interpreted as anything but “lashing out against an entire community” and that Orsher should be dismissed.
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