www.bethelfinance.com
Israel Discount Bank (TASE: DSCT) reported double-digit profit growth on lower revenue for 2011.
Net profit attributable to majority shareholders rose 21% to NIS 852 million (NIS 0.81 per share) in 2011 from NIS 704 million in 2010. The bank's return on equity rose to 8.2% in 2011 from 7% in 2010. The core capital adequacy ratio rose to 8.1% at the end of 2011 from 7.7% a year earlier.
Income from financing operations before provision for credit losses fell 0.9% to NIS 4.78 billion in 2011 from NIS 4.83 billion in 2010, and the provision for credit loss fell 5.2% to NIS 778 million from NIS 821 million.
Fourth quarter net profit rose 69.5% to NIS 222 million from NIS 131 million for the corresponding quarter of 2010, and its return on equity rose to 8.7% from 5.1%. Income from financing operations before provision for credit losses fell 11.8% to NIS 1.14 billion for the fourth quarter from NIS 1.29 billion for the corresponding quarter, and the expense for credit loss fell 8% to NIS 252 million from NIS 274 million.
Discount Bank's deposits from the public rose 11% to NIS 153.4 billion at the end of 2011 from NIS 138 billion a year earlier, but credit to the public fell 2% to NIS 116.4 billion from NIS 118.7 billion.
Discount Bank CEO Reuven Spiegel's salary cost was NIS 7.75 million in 2010, including a salary of NIS 2.23 million, and a bonus of NIS 1.88 million.
Spiegel and chairman Yossi Bachar said in a statement, "2011 was a challenging year for companies in the Israeli economy. Discount Bank's results and achievements for 2011 particularly stand out given the economic climate and market uncertainty."
Discount Bank's share price fell 2.7% in morning trading to NIS 5.20, giving a market cap of NIS 5.6 billion.
Wednesday, March 28, 2012
Bethel Finance:Shekel weakens
www.bethelfinance.com
The shekel is weakening against the dollar and euro in morning inter-bank trading. The shekel-dollar exchange rate is up 0.26%, compared with yesterday's representative rate, to NIS 3.725/$, and the shekel-euro exchange rate is up 0.27% to NIS 4.974/€.
In international markets, the dollar is traded at $1.333/€ against the euro and at ¥82.72/$ against the yen.
In macroeconomics, analysts expect durable goods orders for February, which will be published today, to rise by 3% over January.
The shekel is weakening against the dollar and euro in morning inter-bank trading. The shekel-dollar exchange rate is up 0.26%, compared with yesterday's representative rate, to NIS 3.725/$, and the shekel-euro exchange rate is up 0.27% to NIS 4.974/€.
In international markets, the dollar is traded at $1.333/€ against the euro and at ¥82.72/$ against the yen.
In macroeconomics, analysts expect durable goods orders for February, which will be published today, to rise by 3% over January.
Bethel Finance: Shikun U'Binui results indicate slowdown in home sales
www.bethelfinance.com
The cooling of Israel's housing market caused a 27% drop in homes sales in 2011 by Shikun u'Binui Holdings Ltd. (TASE: SKBN), controlled by Shari Arison through Arison Holdings Ltd. However, the performance of the company's other operations resulted in higher revenue, although profits fell sharply. The company expects that the government's efforts to cool the housing market will continue to adversely affects its results in 2012, but CEO Ofer Kotler told "Globes" that the company's other operations will offset the weakness in the housing market. He therefore does not expect that the company's revenue and profit will be harmed in 2012.
Shikun u'Binui, Israel's largest residential construction company, said in its financial report that the slowing in apartment prices was due to the increase in housing starts, interest rate hikes by the Bank of Israel and its macro-prudential measures, as well as tax measures by the Ministry of Finance. "The impact of these measures, like the land marketing efforts by the Ministry of Housing and Construction, may have an effect during this year," it says.
Shikun u'Binui built 830 apartments in 2011, 27% fewer than the 1,142 apartments built in 2010. It believes that the drop in apartment sales is temporary. "There has been no change in the scale of the company's activities in the sector, nor any material change in the number of housing units under construction, because of the assessment that there is still a housing shortage and the slowdown in demand is only temporary," it says. Kotler predicts that home prices and sales will again rise in 2013 because of the decline in housing starts.
Shikun u'Binui's revenue rose 10% to NIS 5.34 billion in 2011 from NIS 4.87 billion in 2010. Fourth quarter revenue rose 13% to NIS 1.41 billion from NIS 1.25 billion for the corresponding quarter of 2010. Residential construction in Israel accounts for only 20% of the company's revenue. Its other operations include infrastructures in Israel and internationally through Shikun u'Binui Solel Boneh Building and Infrastructure Ltd. and Solel Boneh International Ltd., desalination and water, and renewable energy. These operations more than offset the dip in the company's domestic residential construction business.
Net profit fell 19% to NIS 444 million in 2011 from NIS 545 million in 2010. Fourth quarter net profit fell 76% to NIS 76 million from NIS 295 million for the corresponding quarter.
The company recognized revenue from apartments sold before 2011, which improved its overall numbers for the year. It reported NIS 811.4 million revenue from 649 apartments delivered, compared with NIS 587.1 million in 2011. Gross profit from domestic home sales rose to NIS 292.8 million in 2011 from NIS 191.8 million in 2010.
Despite the drop in profits, uncertainty in the real estate market, and worries about regulations by the government and Bank of Israel, Kotler's salary cost was NIS 7.7 million in 2011, including a NIS 4.4 million bonus. The salary cost of chairwoman Ravit Barnit was NIS 6.7 million, and the salary cost of Shikun u'Binui Real Estate CEO Tamir Dagan was NIS 5 million.
"In general, 2012 will be at least as good as 2011 by every measure, including revenue, net profit, and operating profit," said Kotler. "There is some drop in apartment sales in Israel, but we increased the number of sites, and in recent months we began work on new sites in Yokne'am, Hadera, and Ashkelon. We'll build hundreds of apartments there."
"Globes": How is it that press releases by contractors in recent months talk about demand and sales, but we see a plunge in sales in financial reports?
Kotler: "There is a combination of demand and supply, but all in all, this is a sophisticated market that balances out over time. Even if there is some drop in apartment prices in 2012, this will right itself in 2013 because there won't be housing starts."
The cooling of Israel's housing market caused a 27% drop in homes sales in 2011 by Shikun u'Binui Holdings Ltd. (TASE: SKBN), controlled by Shari Arison through Arison Holdings Ltd. However, the performance of the company's other operations resulted in higher revenue, although profits fell sharply. The company expects that the government's efforts to cool the housing market will continue to adversely affects its results in 2012, but CEO Ofer Kotler told "Globes" that the company's other operations will offset the weakness in the housing market. He therefore does not expect that the company's revenue and profit will be harmed in 2012.
Shikun u'Binui, Israel's largest residential construction company, said in its financial report that the slowing in apartment prices was due to the increase in housing starts, interest rate hikes by the Bank of Israel and its macro-prudential measures, as well as tax measures by the Ministry of Finance. "The impact of these measures, like the land marketing efforts by the Ministry of Housing and Construction, may have an effect during this year," it says.
Shikun u'Binui built 830 apartments in 2011, 27% fewer than the 1,142 apartments built in 2010. It believes that the drop in apartment sales is temporary. "There has been no change in the scale of the company's activities in the sector, nor any material change in the number of housing units under construction, because of the assessment that there is still a housing shortage and the slowdown in demand is only temporary," it says. Kotler predicts that home prices and sales will again rise in 2013 because of the decline in housing starts.
Shikun u'Binui's revenue rose 10% to NIS 5.34 billion in 2011 from NIS 4.87 billion in 2010. Fourth quarter revenue rose 13% to NIS 1.41 billion from NIS 1.25 billion for the corresponding quarter of 2010. Residential construction in Israel accounts for only 20% of the company's revenue. Its other operations include infrastructures in Israel and internationally through Shikun u'Binui Solel Boneh Building and Infrastructure Ltd. and Solel Boneh International Ltd., desalination and water, and renewable energy. These operations more than offset the dip in the company's domestic residential construction business.
Net profit fell 19% to NIS 444 million in 2011 from NIS 545 million in 2010. Fourth quarter net profit fell 76% to NIS 76 million from NIS 295 million for the corresponding quarter.
The company recognized revenue from apartments sold before 2011, which improved its overall numbers for the year. It reported NIS 811.4 million revenue from 649 apartments delivered, compared with NIS 587.1 million in 2011. Gross profit from domestic home sales rose to NIS 292.8 million in 2011 from NIS 191.8 million in 2010.
Despite the drop in profits, uncertainty in the real estate market, and worries about regulations by the government and Bank of Israel, Kotler's salary cost was NIS 7.7 million in 2011, including a NIS 4.4 million bonus. The salary cost of chairwoman Ravit Barnit was NIS 6.7 million, and the salary cost of Shikun u'Binui Real Estate CEO Tamir Dagan was NIS 5 million.
"In general, 2012 will be at least as good as 2011 by every measure, including revenue, net profit, and operating profit," said Kotler. "There is some drop in apartment sales in Israel, but we increased the number of sites, and in recent months we began work on new sites in Yokne'am, Hadera, and Ashkelon. We'll build hundreds of apartments there."
"Globes": How is it that press releases by contractors in recent months talk about demand and sales, but we see a plunge in sales in financial reports?
Kotler: "There is a combination of demand and supply, but all in all, this is a sophisticated market that balances out over time. Even if there is some drop in apartment prices in 2012, this will right itself in 2013 because there won't be housing starts."
Wednesday, March 21, 2012
Bethel Finance: Singapore's New Credit Rating Agency Regulations Will Bode Well for Firms
Bethel Finance is confident that Singapore's new regulatory framework for Credit Rating Agencies (CRAs) as well as ESMA's recent approval of it will strengthen investor confidence and catalyze business activity.
Bethel Finance is optimistic that Singapore's new regulatory framework for CRAs as well as the European Securities and Markets Authority's (ESMA) recent approval of it will bode well for Singapore firms and bolster investor confidence in Singapore.
Recently, the Monetary Authority of Singapore (MAS) has implemented a new regulatory framework for Credit Rating Agencies (CRA) under the Securities and Futures Act (SFA). Under this Act, CRAs are required to obtain the Capital Markets Services (CMS) license and comply with a corresponding code of conduct.
Additionally, its representatives will be required to hold at least a Bachelor's degree in a relevant discipline and be registered with MAS before performing the role and providing credit rating services.
Analysis by Bethel Finance shows that these measures protect the interests of investors by ensuring that Singapore's financial markets are well-regulated and meet high safety standards. ESMA's stamp of approval serves as the icing on the cake as it affirms that Singapore's regulatory framework for CRAs is on-point and aligned with EU's CRA regulations.
"Foreign investors and venture capitalists are more inclined to spend in jurisdictions which are safe and promise high returns on investments. On the back of ESMA's endorsement, we anticipate that Singapore's new CRA regulations will in turn pave the way for more foreign direct investments to flow into Singapore," affirmed Mr.David Marmet, Head of Bethel Finance's Operations.
Further analysis by Bethel Finance shows that a higher inflow of foreign direct investments (FDIs) will in turn generate a more optimistic business sentiment and attract entrepreneurs and firms to register a Singapore company.
"The immediacies of running a business day to day means that entrepreneurs and key decision makers take cue from and flock to jurisdictions that can continually attract high inflows of investments. Singapore's track record of doing so has been assuring to firms and entrepreneurs require a stable business environment that can weather economic headwinds and offer credit at lower interest rates."
"The new regulations will ensure that Singapore's financial market remains buoyant, investor confidence intact and business sentiment positive. We therefore anticipate the new regulations on the back of ESMA's endorsement to serve as a call to action and encourage entrepreneurs to form a Singapore company," added Mr. Bakhda.
ABOUT Bethel Finance:
Bethel Finance is a new boutique investment firm dedicated to serving the financial needs of wealthy Israeli families in Israel and abroad. The founders of the company have managed similar activities in Europe and North America for years.
Bethel Finance Ltd
Engel House 88 Ygal Allon St
Tel Aviv 67891 Israël
Phone: + 972 (0)3-6437999
Fax: + 972 (0)3-6437889
Skype: bethelfinance
Email:info@bethelfinance.com
www.bethelfinance.com
Bethel Finance is optimistic that Singapore's new regulatory framework for CRAs as well as the European Securities and Markets Authority's (ESMA) recent approval of it will bode well for Singapore firms and bolster investor confidence in Singapore.
Recently, the Monetary Authority of Singapore (MAS) has implemented a new regulatory framework for Credit Rating Agencies (CRA) under the Securities and Futures Act (SFA). Under this Act, CRAs are required to obtain the Capital Markets Services (CMS) license and comply with a corresponding code of conduct.
Additionally, its representatives will be required to hold at least a Bachelor's degree in a relevant discipline and be registered with MAS before performing the role and providing credit rating services.
Analysis by Bethel Finance shows that these measures protect the interests of investors by ensuring that Singapore's financial markets are well-regulated and meet high safety standards. ESMA's stamp of approval serves as the icing on the cake as it affirms that Singapore's regulatory framework for CRAs is on-point and aligned with EU's CRA regulations.
"Foreign investors and venture capitalists are more inclined to spend in jurisdictions which are safe and promise high returns on investments. On the back of ESMA's endorsement, we anticipate that Singapore's new CRA regulations will in turn pave the way for more foreign direct investments to flow into Singapore," affirmed Mr.David Marmet, Head of Bethel Finance's Operations.
Further analysis by Bethel Finance shows that a higher inflow of foreign direct investments (FDIs) will in turn generate a more optimistic business sentiment and attract entrepreneurs and firms to register a Singapore company.
"The immediacies of running a business day to day means that entrepreneurs and key decision makers take cue from and flock to jurisdictions that can continually attract high inflows of investments. Singapore's track record of doing so has been assuring to firms and entrepreneurs require a stable business environment that can weather economic headwinds and offer credit at lower interest rates."
"The new regulations will ensure that Singapore's financial market remains buoyant, investor confidence intact and business sentiment positive. We therefore anticipate the new regulations on the back of ESMA's endorsement to serve as a call to action and encourage entrepreneurs to form a Singapore company," added Mr. Bakhda.
ABOUT Bethel Finance:
Bethel Finance is a new boutique investment firm dedicated to serving the financial needs of wealthy Israeli families in Israel and abroad. The founders of the company have managed similar activities in Europe and North America for years.
Bethel Finance Ltd
Engel House 88 Ygal Allon St
Tel Aviv 67891 Israël
Phone: + 972 (0)3-6437999
Fax: + 972 (0)3-6437889
Skype: bethelfinance
Email:info@bethelfinance.com
www.bethelfinance.com
Bethel Finance: Singapore's Number Nine Ranking is Still Fine
www.bethelfinance.com
Although Singapore has been listed as the ninth best country for business in Bloomberg's latest survey, Singapore company registration specialists Bethel Finance Ltd is confident that the Republic trumps the Special Administrative Region on some factors.
www.bethelfinance.com
In spite of Singapore's lower ranking vis-a-vis Hong Kong in the latest Bloomberg Best Countries for Business survey, Singapore company registration specialists Bethel Finance is confident that the Republic is positioned to attract more businesses that value lower rental rates, cleaner environment and tax rebates for making their way up the productivity value chain.
Bloomberg's Best Countries for Business survey evaluated 160 markets along six categories namely the 1) costs of setting up business, 2) hiring and moving goods, 3) the degree of economic integration, 4) costs of labor and material, 5) less tangible costs and 6) the readiness of the local consumer base.
Hong Kong, which came first in the list, scored higher than Singapore on all fronts. However, company registration specialists Mr. David Marmet ( Bethel Finance Ltd )has recognized three crucial factors that continue to compel entrepreneurs and firms to form a Singapore company, namely 1) lower office rental rates, 2) cleaner environment and 3) the tax rebates offered through the Productivity and Innovation Credit (PIC) scheme.
LOWER OFFICE RENTAL RATES IN SINGAPORE
Prime office rental rates has consistently been lower in Singapore than in Hong Kong. Knight Frank's recent study has demonstrated that Central Hong Kong has superceded London's West End for having the highest prime office rental rates worldwide in 2011. Colliers International's H2 2011 Global Office Demand Growth survey has also affirmed this trend.
The survey showed that Hong Kong offers the most expensive net rental rate for Class A office spaces not only in Asia, but globally. As of December 2011, the rate for Class A office spaces was US$178.34 per square feet. In comparison, office space of the same quality in Singapore cost almost a third of that during the same period. At US$65.81 per square feet, prime office space in Singapore offers both startups and MNCs immense cost savings.
CLEANER ENVIRONMENT
A beautiful office space is nothing if the tenant cannot enjoy the view. Hong Kong is notorious for its persistently poor air quality. According to a recent report by Civic Exchange, the Region's air pollution levels is responsible for over 528, 000 hospital bed days and over 49 million medical visits since 2005. The city is only beginning to chart a new roadmap to improve its air quality in the face of rising criticism by academics, businesses and international bodies like WHO.
Singapore, on the other hand offers high air quality compared to Hong Kong and other cities in the region. Sources of air pollution has long been well-regulated in Singapore and the government has enforced minimum emission standards under the Environmental Protection and Management (Air Impurities) Regulations in 2000 to ensure that air remains clean and safe in Singapore.
Furthermore, the Singapore government's recent announcement of a S$75 million injection to support agencies including the Singapore Green Building Council and the Waste Management and Recycling Association over the next four years is a testament to Singapore's commitment to maintaining high environmental standards for its residents.
TAX REBATES THROUGH THE PIC SCHEME
In gist, the Productivity and Innovation Credit scheme allows firms enjoy tax rebates or cash payouts when they move up the productivity and innovation chain.The updated scheme grants every Singapore firm a 400% tax deduction or a 60% cash payout option when investments are made in six productivity-enhancing and innovation activities per annum. "This in turn means that Singapore firms that plan their productivity and innovation strategies ahead of time could potentially reap up to S$9.6 million in tax savings on their annual taxable income" said Mr. David Marmet from Bethel Finance Ltd.
Further analysis by Bethel Finance shows that the World Bank has ranked Singapore as the Easiest Place to do Business. As discussed in a recent analysis of EIU's ranking, Singapore is the world's third and Asia's most competitive city due to its ability to attract businesses, capital, talent and tourists.
Commenting on the Mr. David Marmet, Head of Operations, Bethel Finance, said, "In the near term, Hong Kong is an attractive location as it offers a slightly lower corporate tax rate and robust free market policies. However, in that regard, Singapore can closely match those terms and more. The three factors discussed demonstrate that Singapore offers a better environment to live, open a company and relocate a family. We anticipate that more discerning entrepreneurs and professionals will instead start a Singapore company with the long-term view of relocating their loved ones and growing the business."
ABOUT Bethel Finance:
Bethel Finance is a new boutique investment firm dedicated to serving the financial needs of wealthy Israeli families in Israel and abroad. The founders of the company have managed similar activities in Europe and North America for years.
Bethel Finance Ltd
Engel House 88 Ygal Allon St
Tel Aviv 67891 Israël
Phone: + 972 (0)3-6437999
Fax: + 972 (0)3-6437889
Skype: bethelfinance
Email:info@bethelfinance.com
www.bethelfinance.com
Although Singapore has been listed as the ninth best country for business in Bloomberg's latest survey, Singapore company registration specialists Bethel Finance Ltd is confident that the Republic trumps the Special Administrative Region on some factors.
www.bethelfinance.com
In spite of Singapore's lower ranking vis-a-vis Hong Kong in the latest Bloomberg Best Countries for Business survey, Singapore company registration specialists Bethel Finance is confident that the Republic is positioned to attract more businesses that value lower rental rates, cleaner environment and tax rebates for making their way up the productivity value chain.
Bloomberg's Best Countries for Business survey evaluated 160 markets along six categories namely the 1) costs of setting up business, 2) hiring and moving goods, 3) the degree of economic integration, 4) costs of labor and material, 5) less tangible costs and 6) the readiness of the local consumer base.
Hong Kong, which came first in the list, scored higher than Singapore on all fronts. However, company registration specialists Mr. David Marmet ( Bethel Finance Ltd )has recognized three crucial factors that continue to compel entrepreneurs and firms to form a Singapore company, namely 1) lower office rental rates, 2) cleaner environment and 3) the tax rebates offered through the Productivity and Innovation Credit (PIC) scheme.
LOWER OFFICE RENTAL RATES IN SINGAPORE
Prime office rental rates has consistently been lower in Singapore than in Hong Kong. Knight Frank's recent study has demonstrated that Central Hong Kong has superceded London's West End for having the highest prime office rental rates worldwide in 2011. Colliers International's H2 2011 Global Office Demand Growth survey has also affirmed this trend.
The survey showed that Hong Kong offers the most expensive net rental rate for Class A office spaces not only in Asia, but globally. As of December 2011, the rate for Class A office spaces was US$178.34 per square feet. In comparison, office space of the same quality in Singapore cost almost a third of that during the same period. At US$65.81 per square feet, prime office space in Singapore offers both startups and MNCs immense cost savings.
CLEANER ENVIRONMENT
A beautiful office space is nothing if the tenant cannot enjoy the view. Hong Kong is notorious for its persistently poor air quality. According to a recent report by Civic Exchange, the Region's air pollution levels is responsible for over 528, 000 hospital bed days and over 49 million medical visits since 2005. The city is only beginning to chart a new roadmap to improve its air quality in the face of rising criticism by academics, businesses and international bodies like WHO.
Singapore, on the other hand offers high air quality compared to Hong Kong and other cities in the region. Sources of air pollution has long been well-regulated in Singapore and the government has enforced minimum emission standards under the Environmental Protection and Management (Air Impurities) Regulations in 2000 to ensure that air remains clean and safe in Singapore.
Furthermore, the Singapore government's recent announcement of a S$75 million injection to support agencies including the Singapore Green Building Council and the Waste Management and Recycling Association over the next four years is a testament to Singapore's commitment to maintaining high environmental standards for its residents.
TAX REBATES THROUGH THE PIC SCHEME
In gist, the Productivity and Innovation Credit scheme allows firms enjoy tax rebates or cash payouts when they move up the productivity and innovation chain.The updated scheme grants every Singapore firm a 400% tax deduction or a 60% cash payout option when investments are made in six productivity-enhancing and innovation activities per annum. "This in turn means that Singapore firms that plan their productivity and innovation strategies ahead of time could potentially reap up to S$9.6 million in tax savings on their annual taxable income" said Mr. David Marmet from Bethel Finance Ltd.
Further analysis by Bethel Finance shows that the World Bank has ranked Singapore as the Easiest Place to do Business. As discussed in a recent analysis of EIU's ranking, Singapore is the world's third and Asia's most competitive city due to its ability to attract businesses, capital, talent and tourists.
Commenting on the Mr. David Marmet, Head of Operations, Bethel Finance, said, "In the near term, Hong Kong is an attractive location as it offers a slightly lower corporate tax rate and robust free market policies. However, in that regard, Singapore can closely match those terms and more. The three factors discussed demonstrate that Singapore offers a better environment to live, open a company and relocate a family. We anticipate that more discerning entrepreneurs and professionals will instead start a Singapore company with the long-term view of relocating their loved ones and growing the business."
ABOUT Bethel Finance:
Bethel Finance is a new boutique investment firm dedicated to serving the financial needs of wealthy Israeli families in Israel and abroad. The founders of the company have managed similar activities in Europe and North America for years.
Bethel Finance Ltd
Engel House 88 Ygal Allon St
Tel Aviv 67891 Israël
Phone: + 972 (0)3-6437999
Fax: + 972 (0)3-6437889
Skype: bethelfinance
Email:info@bethelfinance.com
www.bethelfinance.com
Bethel Finance: Concentration c'tee members disagree on holding companies ban
www.bethelfinance.com
The Committee on Concentration in the Economy, headed by former Ministry of Finance director general Haim Shani, submitted its final report to Prime Minister Benjamin Netanyahu, Minister of Finance Yuval Steinitz, and Governor of the Bank of Israel Prof. Stanley Fischer today, one month after the disclosure of its recommendations in the media. There is no change in the recommendations, but the final report reveals, for the first time, the minority opinion about the critical matter of pyramids by two of its members: Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig and National Economics Committee chairman Eugene Kandel.
The minority opinion of Sarig and Kandel, experts on these issues, matches the views of Israel Securities Authority chairman Prof. Shmuel Hauser and Budget Director Gal Hershkowitz.
Sairg and Kandel say that they agree with the recommendations, which offer the right balance and proportionality between ensuring an efficient and competitive market, and minimizing the damage to private sector activity. They believe that the ban on pyramid holding structures with more than two layers should distinguish between public traded companies and bond companies (private companies that only have bonds traded on the TASE).
In other words, a bond holding company that controls two publicly traded ubsidiaries should not be considered as a layer in a pyramid structure. "Regrettably, bond companies should be allowed to hold two layers of public companies for a limited period of time (up to five years), similar to the committee's recommendation to permit the floating of subsidiaries to the public as a third layer in a pyramid for a designated period of time," Kandel and Sarig write. The reason is simple: in the case of a bond company, a "gap company" would not be created, because the principle of strong control through limited capital will not exist.
Sarig and Kandel say that the recommendation adopted by the Concentration Committee does not offer any reason for distinguishing between the different financing (tradable and non-tradable capital), and creates a preference for a certain method of financing, without offering a reason. They warn against the risk that the committee's recommendations on this point are liable to make it difficult to buy or sell companies that the recommendations will compel the sale of (to separate financial and non-financial holdings and reduce pyramid structures)
"The recommendations without our change will render the building of public holding companies less worthwhile in the future," they write.
The Committee on Concentration in the Economy, headed by former Ministry of Finance director general Haim Shani, submitted its final report to Prime Minister Benjamin Netanyahu, Minister of Finance Yuval Steinitz, and Governor of the Bank of Israel Prof. Stanley Fischer today, one month after the disclosure of its recommendations in the media. There is no change in the recommendations, but the final report reveals, for the first time, the minority opinion about the critical matter of pyramids by two of its members: Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig and National Economics Committee chairman Eugene Kandel.
The minority opinion of Sarig and Kandel, experts on these issues, matches the views of Israel Securities Authority chairman Prof. Shmuel Hauser and Budget Director Gal Hershkowitz.
Sairg and Kandel say that they agree with the recommendations, which offer the right balance and proportionality between ensuring an efficient and competitive market, and minimizing the damage to private sector activity. They believe that the ban on pyramid holding structures with more than two layers should distinguish between public traded companies and bond companies (private companies that only have bonds traded on the TASE).
In other words, a bond holding company that controls two publicly traded ubsidiaries should not be considered as a layer in a pyramid structure. "Regrettably, bond companies should be allowed to hold two layers of public companies for a limited period of time (up to five years), similar to the committee's recommendation to permit the floating of subsidiaries to the public as a third layer in a pyramid for a designated period of time," Kandel and Sarig write. The reason is simple: in the case of a bond company, a "gap company" would not be created, because the principle of strong control through limited capital will not exist.
Sarig and Kandel say that the recommendation adopted by the Concentration Committee does not offer any reason for distinguishing between the different financing (tradable and non-tradable capital), and creates a preference for a certain method of financing, without offering a reason. They warn against the risk that the committee's recommendations on this point are liable to make it difficult to buy or sell companies that the recommendations will compel the sale of (to separate financial and non-financial holdings and reduce pyramid structures)
"The recommendations without our change will render the building of public holding companies less worthwhile in the future," they write.
Bethel Finance: Google Israel chief to head Africa region
www.bethelfinance.com
Google Inc. (Nasdaq: GOOG) has expanded the responsibilities of Google Israel, South Africa & Greece managing director Meir Brand to include Ghana, Kenya, Nigeria, Senegal, and Uganda. Google's offices in these countries have 80 employees. The appointment will come into effect on April 1.
Today, only 9% of Africans have internet access, but studies predict that the proportion will rise to 20% by 2015.
Brand was appointed Google Israel managing director in 2005. He previously served as the small businesses manager at Microsoft Israel, after working at Excite Ltd., ICQ, and Booz Allen & Hamilton. He has an MBA from Harvard Business School.
Google Inc. (Nasdaq: GOOG) has expanded the responsibilities of Google Israel, South Africa & Greece managing director Meir Brand to include Ghana, Kenya, Nigeria, Senegal, and Uganda. Google's offices in these countries have 80 employees. The appointment will come into effect on April 1.
Today, only 9% of Africans have internet access, but studies predict that the proportion will rise to 20% by 2015.
Brand was appointed Google Israel managing director in 2005. He previously served as the small businesses manager at Microsoft Israel, after working at Excite Ltd., ICQ, and Booz Allen & Hamilton. He has an MBA from Harvard Business School.
Bethel Finance: Shekel continues to strengthen against dollar
www.bethelfinance.com
The shekel is split against the dollar and euro in morning inter-bank trading. Continuing yesterday's trend, the shekel-dollar exchange rate is down 0.33%, compared with yesterday's representative rate, at NIS 3.7494/$, and the shekel-euro exchange rate is up 0.2%, at NIS 4.9609/€.
"In international markets, the dollar is traded at $1.32 against the euro, and at ¥83.41 against the Japanese yen" according with Mr. David Marmet from Bethel Finance Ltd.
In Europe, secured Greek bondholders will receive $2.5 billion on their credit default swaps (CDS), a 78.5% payout on their investment. Globally, the price oil, which has risen 15% since January, continues to rise against the backdrop of tensions in the Middle East. The US has sent reinforcements to the Persian Gulf, and Turkish President Recep Tayyip Erdoğan is due to meet Iran's leaders, adding pressure on Iran to pull back on its military nuclear program.
The shekel is split against the dollar and euro in morning inter-bank trading. Continuing yesterday's trend, the shekel-dollar exchange rate is down 0.33%, compared with yesterday's representative rate, at NIS 3.7494/$, and the shekel-euro exchange rate is up 0.2%, at NIS 4.9609/€.
"In international markets, the dollar is traded at $1.32 against the euro, and at ¥83.41 against the Japanese yen" according with Mr. David Marmet from Bethel Finance Ltd.
In Europe, secured Greek bondholders will receive $2.5 billion on their credit default swaps (CDS), a 78.5% payout on their investment. Globally, the price oil, which has risen 15% since January, continues to rise against the backdrop of tensions in the Middle East. The US has sent reinforcements to the Persian Gulf, and Turkish President Recep Tayyip Erdoğan is due to meet Iran's leaders, adding pressure on Iran to pull back on its military nuclear program.
Bethel Finance: Cellcom raises NIS 991m in debt
www.bethelfinance.com
Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has raised a net NIS 991,6 million in the public tenders of its Series F and Series G bonds in Israel. The offering was oversubscribed, with NIS 1.9 billion in offers, including NIS 1.7 billion from investment institutions.
The Series F bond totals NIS 714,802,000, and bears an annual interest rate of 4.35%. The bond is linked to the Consumer Price Index (CPI). The unlinked Series F bond totals NIS 285,198,000, and bears an annual interest rate of 6.74%.
Cellcom did not say what it would use the proceeds for, but it reportedly plans to raise NIS 1billion. The strong demand for the bonds came despite difficult times for Israel's mobile carriers. Earlier this month, the company reported a 2.3% drop in revenue to NIS 6.51 billion ($1.7 billion) in 2011 from NIS 6.66 billion ($1.74 billion) in 2010. Net profit fell to NIS 825 million ($216 million) or NIS 8.28 ($2.17) per share, in 2011, from NIS 1.29 billion ($338 million) in 2010.
Cellcom's share price has halved in the past 12 months, due to rising competition and tighter regulation.
Cellcom's share price fell 1.5% in morning trading on the TASE today to NIS 46.73, after falling 1% in New York yesterday to $12.49, giving a market cap of $1.24 billion.
Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has raised a net NIS 991,6 million in the public tenders of its Series F and Series G bonds in Israel. The offering was oversubscribed, with NIS 1.9 billion in offers, including NIS 1.7 billion from investment institutions.
The Series F bond totals NIS 714,802,000, and bears an annual interest rate of 4.35%. The bond is linked to the Consumer Price Index (CPI). The unlinked Series F bond totals NIS 285,198,000, and bears an annual interest rate of 6.74%.
Cellcom did not say what it would use the proceeds for, but it reportedly plans to raise NIS 1billion. The strong demand for the bonds came despite difficult times for Israel's mobile carriers. Earlier this month, the company reported a 2.3% drop in revenue to NIS 6.51 billion ($1.7 billion) in 2011 from NIS 6.66 billion ($1.74 billion) in 2010. Net profit fell to NIS 825 million ($216 million) or NIS 8.28 ($2.17) per share, in 2011, from NIS 1.29 billion ($338 million) in 2010.
Cellcom's share price has halved in the past 12 months, due to rising competition and tighter regulation.
Cellcom's share price fell 1.5% in morning trading on the TASE today to NIS 46.73, after falling 1% in New York yesterday to $12.49, giving a market cap of $1.24 billion.
Thursday, March 15, 2012
Bethel Finance: Working parents in rocket-hit South to receive full wages
www.bethelfinance.com
Working parents forced to stay at home during this week’s rocket attacks on southern Israel will receive their wages in full, the Treasury and Histadrut labor federation agreed Wednesday.
Finance Minister Yuval Steinitz ordered that public sector workers not be deducted vacation days for staying home this week. He instructed his staff to find a similar solution for workers in the private sector, based on data to be supplied to the Treasury by private employers in the coming days.
Histadrut Chairman Ofer Eini, Treasury wages director Ilan Levin, and representatives from chambers of commerce, the Tax Authority, Federation of Israeli Economic Organizations, Manufacturers Association and Union of Local Authorities met Wednesday morning. They agreed to formulate a plan to ensure that working parents of children aged under 14 not be deducted vacation days in the future event that classes are cancelled for security reasons. They also agreed to discuss compensation for business owners affected by the violence.
School resumed in the South on Wednesday after rocket attacks from Gaza kept students at home the previous three days. The Home Front Command made the decision to send children back to school as an informal cease-fire between Israel and Gaza factions led to relative calm.
Working parents forced to stay at home during this week’s rocket attacks on southern Israel will receive their wages in full, the Treasury and Histadrut labor federation agreed Wednesday.
Finance Minister Yuval Steinitz ordered that public sector workers not be deducted vacation days for staying home this week. He instructed his staff to find a similar solution for workers in the private sector, based on data to be supplied to the Treasury by private employers in the coming days.
Histadrut Chairman Ofer Eini, Treasury wages director Ilan Levin, and representatives from chambers of commerce, the Tax Authority, Federation of Israeli Economic Organizations, Manufacturers Association and Union of Local Authorities met Wednesday morning. They agreed to formulate a plan to ensure that working parents of children aged under 14 not be deducted vacation days in the future event that classes are cancelled for security reasons. They also agreed to discuss compensation for business owners affected by the violence.
School resumed in the South on Wednesday after rocket attacks from Gaza kept students at home the previous three days. The Home Front Command made the decision to send children back to school as an informal cease-fire between Israel and Gaza factions led to relative calm.
Bethel Finance: Egypt gas disruptions cost Israel NIS 15b
www.bethelfinance.com
Disruptions in deliveries of Egyptian natural gas has cost Israel NIS 15 billion - NIS 12 billion to buy alternative fuel, and NIS 3 billion in environmental damage - Finance Ministry acting director general Doron Cohen told an Israeli Institute Of Energy And Environment on Wednesday.
Prime Minister's Office director general Harel Locker said that gas flow from Tamar, which would save NIS 4 billion a year, has been delayed by one year due to opposition to the construction of a gas terminal at Dor beach. He said that the government would offer local authorities incentives for their consent to build the terminal.
"The question is why there is still a natural gas shortage in Israel, and why gas is not yet flowing from the discoveries," said Locker. "In early 2010, the prime minister was shown a report for the development of the Tamar field. The report stated that natural gas would start flowing in March 2010. We should now have been celebrating the completion of this project, but it hasn’t happened."
"The main reason for the delay is the National Planning and Building Commission's delay in approving a coastal site for the gas terminalת" Locker explained. "The economic consequences of this delay are NIS 4 billion a year, according to one estimate. What could we have done with this money: 10 hospitals, 2,500 classrooms, or 40 road interchanges."
Disruptions in deliveries of Egyptian natural gas has cost Israel NIS 15 billion - NIS 12 billion to buy alternative fuel, and NIS 3 billion in environmental damage - Finance Ministry acting director general Doron Cohen told an Israeli Institute Of Energy And Environment on Wednesday.
Prime Minister's Office director general Harel Locker said that gas flow from Tamar, which would save NIS 4 billion a year, has been delayed by one year due to opposition to the construction of a gas terminal at Dor beach. He said that the government would offer local authorities incentives for their consent to build the terminal.
"The question is why there is still a natural gas shortage in Israel, and why gas is not yet flowing from the discoveries," said Locker. "In early 2010, the prime minister was shown a report for the development of the Tamar field. The report stated that natural gas would start flowing in March 2010. We should now have been celebrating the completion of this project, but it hasn’t happened."
"The main reason for the delay is the National Planning and Building Commission's delay in approving a coastal site for the gas terminalת" Locker explained. "The economic consequences of this delay are NIS 4 billion a year, according to one estimate. What could we have done with this money: 10 hospitals, 2,500 classrooms, or 40 road interchanges."
Bethel Finance: Showcasing Israel's farm riches
www.bethelfinance.com
Visiting a food market in a far-flung destination is a great way to get a sense of the people who live there. Israel is no exception. The market in Tel Aviv, Israel's largest city, showcases the small desert country's agricultural innovations and the immigrant backgrounds of many Israeli residents.
Tel Aviv's Carmel market, also known as Shuk Ha'Carmel, is close to the shore and a short walk down Allenby Street from the city's hotel area. It's part flea market, with vendors selling clothes, trinkets, cosmetics and cigarettes — there's something quirky about seeing Camel cigarettes for sale in a place where you often see real camels — but mostly it's a foodie haven of dried fruit, exotic spices, local olive oil, imported cheeses and fresh fish, meat and poultry. You also could spend your time dealing with the more immediate needs of an empty stomach by visiting stalls that sell persimmon smoothies, imported chocolates, mounds of colorful candies, fresh falafel, halva, lamb shawarma and borekas, the salty stuffed Turkish puff pastries that seem to be everywhere in Israel.
Tel Aviv chef Yair Feinberg, 35, gives market tours to travelers as part of his culinary business Fein Cook. He also offers cooking classes, specialty dinners and works on an Israeli television version of "Iron Chef." Feinberg, the son of Argentine immigrants, grew up on a kibbutz in Israel's Negev region and trained to be a chef at L'Institut Paul Bocuse in France. He later worked in several Michelin-star-receiving restaurants in Paris, Provence, France, and Tuscany, Italy, before returning to Israel in 2005.
It's easy to wander the market alone and relish your solo discoveries. But a trip with someone like Feinberg can add insight and explanations about what you are seeing.
Take the giant lemons, for instance. After sampling some of the largest and juiciest clementines I'd ever tasted, I was convinced I was in the land of giant fruit when I came across what I was sure were the largest lemons I'd ever seen — about the size of a 16-inch softball.
Feinberg said the fruit actually is a pomelo, a large citrus fruit originally from Asia. The pomelo is now grown in Israel, where it also is crossbred with grapefruit to create Israel's Sweetie. Sweeties are similar in size to a grapefruit but sweeter, with thick green or yellow skin and a remarkable 40 or fewer calories per fruit.
Feinberg is happy to talk about Israel's agricultural innovations. He said that when the country was young and dealing with its lack of arable land and water, farmers worked at developing fruits and vegetables that would survive and thrive in the desert climate. The results include special varieties of mushrooms and strawberries that grow large and sweet in greenhouses where insects are used to fight common diseases that limit growth, he said.
If your schedule is flexible, plan to visit the Carmel market on a Tuesday or Friday, when local artisans display and sell their wares on the nearby pedestrian mall and the area is turned into a kind of street fair. Jewelry, wood carvings and stained glass are among the offerings.
If you want to sit down for a meal during your market visit, consider HaBasta restaurant, a favorite of local chefs. Chef Maoz Alonim is known for his use of fresh ingredients.
For a good cup of strong coffee in a funky little storefront, head a few blocks southwest of the Carmel market to Levinsky Street and its spice shops. Stop in at Kaymak, 47 Levinsky St., where the American expat owner will give you something warm to drink, as well as a place to sit and watch the world go by. It's impossible to walk through a market and not consider the people who shop there. While talking about how Israeli olive oil is different — strong and bold — Feinberg said that the description also might apply to Israelis.
"The culinary world in Israel is a mixture of a lot of influences from all the immigrant communities in Israel and the Arab background of the region," he said. "One of the main characteristics of the Israeli food is that it has a very pronounced taste. The sweets are very sweet, the coffee is very bitter.
Visiting a food market in a far-flung destination is a great way to get a sense of the people who live there. Israel is no exception. The market in Tel Aviv, Israel's largest city, showcases the small desert country's agricultural innovations and the immigrant backgrounds of many Israeli residents.
Tel Aviv's Carmel market, also known as Shuk Ha'Carmel, is close to the shore and a short walk down Allenby Street from the city's hotel area. It's part flea market, with vendors selling clothes, trinkets, cosmetics and cigarettes — there's something quirky about seeing Camel cigarettes for sale in a place where you often see real camels — but mostly it's a foodie haven of dried fruit, exotic spices, local olive oil, imported cheeses and fresh fish, meat and poultry. You also could spend your time dealing with the more immediate needs of an empty stomach by visiting stalls that sell persimmon smoothies, imported chocolates, mounds of colorful candies, fresh falafel, halva, lamb shawarma and borekas, the salty stuffed Turkish puff pastries that seem to be everywhere in Israel.
Tel Aviv chef Yair Feinberg, 35, gives market tours to travelers as part of his culinary business Fein Cook. He also offers cooking classes, specialty dinners and works on an Israeli television version of "Iron Chef." Feinberg, the son of Argentine immigrants, grew up on a kibbutz in Israel's Negev region and trained to be a chef at L'Institut Paul Bocuse in France. He later worked in several Michelin-star-receiving restaurants in Paris, Provence, France, and Tuscany, Italy, before returning to Israel in 2005.
It's easy to wander the market alone and relish your solo discoveries. But a trip with someone like Feinberg can add insight and explanations about what you are seeing.
Take the giant lemons, for instance. After sampling some of the largest and juiciest clementines I'd ever tasted, I was convinced I was in the land of giant fruit when I came across what I was sure were the largest lemons I'd ever seen — about the size of a 16-inch softball.
Feinberg said the fruit actually is a pomelo, a large citrus fruit originally from Asia. The pomelo is now grown in Israel, where it also is crossbred with grapefruit to create Israel's Sweetie. Sweeties are similar in size to a grapefruit but sweeter, with thick green or yellow skin and a remarkable 40 or fewer calories per fruit.
Feinberg is happy to talk about Israel's agricultural innovations. He said that when the country was young and dealing with its lack of arable land and water, farmers worked at developing fruits and vegetables that would survive and thrive in the desert climate. The results include special varieties of mushrooms and strawberries that grow large and sweet in greenhouses where insects are used to fight common diseases that limit growth, he said.
If your schedule is flexible, plan to visit the Carmel market on a Tuesday or Friday, when local artisans display and sell their wares on the nearby pedestrian mall and the area is turned into a kind of street fair. Jewelry, wood carvings and stained glass are among the offerings.
If you want to sit down for a meal during your market visit, consider HaBasta restaurant, a favorite of local chefs. Chef Maoz Alonim is known for his use of fresh ingredients.
For a good cup of strong coffee in a funky little storefront, head a few blocks southwest of the Carmel market to Levinsky Street and its spice shops. Stop in at Kaymak, 47 Levinsky St., where the American expat owner will give you something warm to drink, as well as a place to sit and watch the world go by. It's impossible to walk through a market and not consider the people who shop there. While talking about how Israeli olive oil is different — strong and bold — Feinberg said that the description also might apply to Israelis.
"The culinary world in Israel is a mixture of a lot of influences from all the immigrant communities in Israel and the Arab background of the region," he said. "One of the main characteristics of the Israeli food is that it has a very pronounced taste. The sweets are very sweet, the coffee is very bitter.
Tuesday, March 13, 2012
Bethel Finance: Lemon Law Will Boost Singapore's Retail Industry
Singapore company registration specialists - Bethel Finance Ltd - is positive that the passing of the Lemon Law will benefit Singapore's retail industry.
The Singapore parliament has recently passed the Lemon Law. Singapore company registration specialists Bethel Finance Ltd is positive that the passing of the Lemon Law will not only benefit consumers and retailers but boost Singapore's retail industry in the long run.
The Lemon Law, which will come into effect on 1 September 2012, is an improvement of the Sale of Goods Act, which contains only some provisions of the Lemon Law. The Lemon Law protects consumers against "lemons" i.e. defective products purchased in Singapore that are of unsatisfactory quality or performance standards at the time of purchase.
Brand new and "satisfactory quality" second-hand consumer goods such as clothing, electronic goods and vehicles fall under the protection of the Lemon Law. If defects are found in these products within six months of purchase, then the Court will presume that the defects have existed at the point of delivery or purchase. The Lemon Law then applies, and in turn grants the consumer a 2-stage recourse framework.
At the first stage, a consumer can request for the retailer to repair and replace defective goods. At the second stage, a consumer may request for a refund or reduction in the price of defective goods if reparation is not possible.
Bethel Finance Ltd is optimistic that the Lemon Law will boost Singapore's retail industry in the long run as it caters to the needs of both consumers and businesses.
First of all, the Lemon Law gives businesses a chance to repair and replace the defective product instead of just issuing refunds.
Commenting on the merits of Law for businesses, Mr. Cedric Marmet , Head of Bethel Finance Ltd Operations, said, "More often than not, consumer goods are manufactured away from the retailing outlets. Unfortunately, customer service representatives often bear the brunt of customers' anger when a product is defective. The Lemon Law clearly defines the boundaries and obligations that entail relationships between businesses and consumers. This in turn buffers the good name of the brand and outlet even in the case that an inexperienced employee is handling the complaint."
Further analysis by Bethel Finance Ltd shows that correspondingly, consumers will be assured by the Lemon Law that Singapore fosters good retail practices and is a safe place to shop. Furthermore, as Singapore raked in almost S$4.5 billion in tourism shopping receipts last year, the passing of the Law sends a message that goods bought in Singapore are quality products.
"Global and local consumers alike will be assured that they will be paying for quality when they shop in Singapore. In the case that the goods turn out to be defective, consumers can have peace of mind that they are protected under the Lemon Law. This assurance could induce higher spending, which in turn benefits businesses and Singapore's retail industry as a whole. We therefore anticipate more retail companies to flourish and entrepreneurs to start a Singapore company when the Law comes into effect," added Mr. Marmet.
The Singapore parliament has recently passed the Lemon Law. Singapore company registration specialists Bethel Finance Ltd is positive that the passing of the Lemon Law will not only benefit consumers and retailers but boost Singapore's retail industry in the long run.
The Lemon Law, which will come into effect on 1 September 2012, is an improvement of the Sale of Goods Act, which contains only some provisions of the Lemon Law. The Lemon Law protects consumers against "lemons" i.e. defective products purchased in Singapore that are of unsatisfactory quality or performance standards at the time of purchase.
Brand new and "satisfactory quality" second-hand consumer goods such as clothing, electronic goods and vehicles fall under the protection of the Lemon Law. If defects are found in these products within six months of purchase, then the Court will presume that the defects have existed at the point of delivery or purchase. The Lemon Law then applies, and in turn grants the consumer a 2-stage recourse framework.
At the first stage, a consumer can request for the retailer to repair and replace defective goods. At the second stage, a consumer may request for a refund or reduction in the price of defective goods if reparation is not possible.
Bethel Finance Ltd is optimistic that the Lemon Law will boost Singapore's retail industry in the long run as it caters to the needs of both consumers and businesses.
First of all, the Lemon Law gives businesses a chance to repair and replace the defective product instead of just issuing refunds.
Commenting on the merits of Law for businesses, Mr. Cedric Marmet , Head of Bethel Finance Ltd Operations, said, "More often than not, consumer goods are manufactured away from the retailing outlets. Unfortunately, customer service representatives often bear the brunt of customers' anger when a product is defective. The Lemon Law clearly defines the boundaries and obligations that entail relationships between businesses and consumers. This in turn buffers the good name of the brand and outlet even in the case that an inexperienced employee is handling the complaint."
Further analysis by Bethel Finance Ltd shows that correspondingly, consumers will be assured by the Lemon Law that Singapore fosters good retail practices and is a safe place to shop. Furthermore, as Singapore raked in almost S$4.5 billion in tourism shopping receipts last year, the passing of the Law sends a message that goods bought in Singapore are quality products.
"Global and local consumers alike will be assured that they will be paying for quality when they shop in Singapore. In the case that the goods turn out to be defective, consumers can have peace of mind that they are protected under the Lemon Law. This assurance could induce higher spending, which in turn benefits businesses and Singapore's retail industry as a whole. We therefore anticipate more retail companies to flourish and entrepreneurs to start a Singapore company when the Law comes into effect," added Mr. Marmet.
Friday, March 9, 2012
Bethel Finance: Antitrust Authority approves Ace sale to Electra
www.bethelfinance.com
The sale of DIY chain Ace to Electra Consumer Products Ltd. (TASE:ECP) has been given the go ahead. Antitrust Authority director Prof. David Gilo gave his approval to the sale this evening, “Globes” has learned.
The terms of the approval may include restrictions on Electra.
Electra Consumer Products CEO Yaki Vadmani said, “We welcome the decision of the Antitrust Authority director, and wish the employees, customers, and suppliers of Ace, and all the people of Israel, a happy Purim holiday.”
Last month, the court approved the sale of Ace, which ran into financial difficulties in January, to Electra Consumer Products for NIS 129 million.
The sale of DIY chain Ace to Electra Consumer Products Ltd. (TASE:ECP) has been given the go ahead. Antitrust Authority director Prof. David Gilo gave his approval to the sale this evening, “Globes” has learned.
The terms of the approval may include restrictions on Electra.
Electra Consumer Products CEO Yaki Vadmani said, “We welcome the decision of the Antitrust Authority director, and wish the employees, customers, and suppliers of Ace, and all the people of Israel, a happy Purim holiday.”
Last month, the court approved the sale of Ace, which ran into financial difficulties in January, to Electra Consumer Products for NIS 129 million.
Bethel Finance: Steinitz clashes with Weinstein on new tax chief
www.bethelfinance.com
There has been an angry clash between Minister of Finance Yuval Steinitz and Attorney General Yehuda Weinstein over the appointment of Tax Authority head Moshe Asher. Sources inform "Globes" that, last night, Weinstein sought to stop the vote on the matter, hours after "Globes" revealed that Sunday's cabinet meeting would vote on the appointment, and that Steinitz, along with most ministers, was expected to vote against it.
Yesterday, the Prime Minister's Office confirmed that a vote would be taken on the appointment on Sunday. However, a few hours later, a change of plan was reported, and the Prime Minister's Office stated: "After consultation with the Attorney General, it has been decided not to vote on the matter this week."
The Ministry of Justice said, "The subject is currently in the throes of being considered at the most senior levels. Naturally we cannot amplify on this at the moment with regard to the content of the deliberations." The Ministry of Justice said that the Attorney General had asked to examine some of the legal aspects of the matter. The vote has already been delayed for more than a month - long enough to carry out many checks.
Anger in the minister's office
Sources inform "Globes" that the Attorney General has discovered that the reason why the cabinet will vote against Asher is that intensive work by Steinitz has persuaded other ministers to oppose the appointment. Thus Weinstein requested the postponement of the vote, which he sees as contempt of court by the cabinet. Weinstein is determined that Asher will be appointed after the appointments committee unanimously chose him as the sole candidate, following a thorough examination of candidates, and the Supreme Court mandated Steinitz to put the candidacy to the cabinet vote.
Steinitz's aides are enraged by the attorney general's decision to postpone the vote, which they describe as "impudent", and they believe that it is the cabinet's right to vote against the appointment. For Steinitz the affair is extremely embarrassing and the vote on Sunday had been meant to put an end to the matter.
Regarding claims that Steinitz conducted a campaign to persuade ministers to oppose the appointment, sources in his office said that, "He was not the only minister that conducted this or that campaign on the subject." This was a reference to Minister of Justice Yaakov Neeman, who supports Asher's appointment. Asher was an articled clerk in Neeman's law office in the 1990s. The belief is that Prime Minister Benjamin Netanyahu will be asked to decide on the matter.
Steinitz's office said in response, "The Minister of Finance submitted the decision to the cabinet secretariat, and the responsibility of placing it before the cabinet rests with the cabinet secretariat. The minister of finance has met his obligations to the High Court of Justice."
The Ministry of Justice declined to comment.
There has been an angry clash between Minister of Finance Yuval Steinitz and Attorney General Yehuda Weinstein over the appointment of Tax Authority head Moshe Asher. Sources inform "Globes" that, last night, Weinstein sought to stop the vote on the matter, hours after "Globes" revealed that Sunday's cabinet meeting would vote on the appointment, and that Steinitz, along with most ministers, was expected to vote against it.
Yesterday, the Prime Minister's Office confirmed that a vote would be taken on the appointment on Sunday. However, a few hours later, a change of plan was reported, and the Prime Minister's Office stated: "After consultation with the Attorney General, it has been decided not to vote on the matter this week."
The Ministry of Justice said, "The subject is currently in the throes of being considered at the most senior levels. Naturally we cannot amplify on this at the moment with regard to the content of the deliberations." The Ministry of Justice said that the Attorney General had asked to examine some of the legal aspects of the matter. The vote has already been delayed for more than a month - long enough to carry out many checks.
Anger in the minister's office
Sources inform "Globes" that the Attorney General has discovered that the reason why the cabinet will vote against Asher is that intensive work by Steinitz has persuaded other ministers to oppose the appointment. Thus Weinstein requested the postponement of the vote, which he sees as contempt of court by the cabinet. Weinstein is determined that Asher will be appointed after the appointments committee unanimously chose him as the sole candidate, following a thorough examination of candidates, and the Supreme Court mandated Steinitz to put the candidacy to the cabinet vote.
Steinitz's aides are enraged by the attorney general's decision to postpone the vote, which they describe as "impudent", and they believe that it is the cabinet's right to vote against the appointment. For Steinitz the affair is extremely embarrassing and the vote on Sunday had been meant to put an end to the matter.
Regarding claims that Steinitz conducted a campaign to persuade ministers to oppose the appointment, sources in his office said that, "He was not the only minister that conducted this or that campaign on the subject." This was a reference to Minister of Justice Yaakov Neeman, who supports Asher's appointment. Asher was an articled clerk in Neeman's law office in the 1990s. The belief is that Prime Minister Benjamin Netanyahu will be asked to decide on the matter.
Steinitz's office said in response, "The Minister of Finance submitted the decision to the cabinet secretariat, and the responsibility of placing it before the cabinet rests with the cabinet secretariat. The minister of finance has met his obligations to the High Court of Justice."
The Ministry of Justice declined to comment.
Bethel Finance: Dankner puts fashion chain Golf up for sale
www.bethelfinance.com
Nochi Dankner has put fashion chain Golf & Co. (TASE:GOLF) up for sale. Sources inform “Globes” that IDB Holding Corp. Ltd. (TASE:IDBH), which controls Golf through Clal Industries (62%), has been looking for a buyer for its stake in recent weeks.
One party with which initial talks have been held is textiles company Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT), controlled by Isaac Dabah, but it is believed that the gap between the two sides on price is preventing negotiations from making progress.
Golf currently has a market cap of NIS 580 million, after losing 25% of its value in the past year.
A spokesperson for Clal Industries stated today that no negotiations were taking place for the sale of Golf. Delta said there were no talks on buying the fashion company.
In recent months IDB has been acting intensively to raise cash to meet its liabilities in the coming years. Among other things, it has held talks recently on a sale of Clal Industries, first with the Livnat family, and later with the Viola group.
It appears that, following the failure of these negotiations, it has been decided to sell part of Clal Industries’ assets. Thus, the company recently reached agreement on the sale of Mashav, which controls cement monopoly Nesher, to the Livnat family for NIS 1.3 billion, and it is now examining possibilities for the sale of Golf, one of the five largest fashion groups in Israel, with 267 stores in all.
Nochi Dankner has put fashion chain Golf & Co. (TASE:GOLF) up for sale. Sources inform “Globes” that IDB Holding Corp. Ltd. (TASE:IDBH), which controls Golf through Clal Industries (62%), has been looking for a buyer for its stake in recent weeks.
One party with which initial talks have been held is textiles company Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT), controlled by Isaac Dabah, but it is believed that the gap between the two sides on price is preventing negotiations from making progress.
Golf currently has a market cap of NIS 580 million, after losing 25% of its value in the past year.
A spokesperson for Clal Industries stated today that no negotiations were taking place for the sale of Golf. Delta said there were no talks on buying the fashion company.
In recent months IDB has been acting intensively to raise cash to meet its liabilities in the coming years. Among other things, it has held talks recently on a sale of Clal Industries, first with the Livnat family, and later with the Viola group.
It appears that, following the failure of these negotiations, it has been decided to sell part of Clal Industries’ assets. Thus, the company recently reached agreement on the sale of Mashav, which controls cement monopoly Nesher, to the Livnat family for NIS 1.3 billion, and it is now examining possibilities for the sale of Golf, one of the five largest fashion groups in Israel, with 267 stores in all.
Bethel Finance: Lifewave fails to make reduced payments to senior managers
www.bethelfinance.com
Wound treatment technology company LifeWave Hi-Tech Medical Devices Ltd. (TASE:LIFE), which suffers from severe cash flow difficulties, has failed to meet a payment due to company chairman Haim Ramon, CEO Michel Afargan, and CFO Gal Peleg, even after they forewent part of their salaries and agreed to defer some of the payments to July.
The failure to abide by the amended agreement means that it becomes void, and the three senior managers can again demand their full salaries from the company. In 2010, Ramon’s salary cost totaled about NIS 1 million (mostly in options), while Afargan and Peleg were entitled to salaries costing NIS 1.54 million and NIS 475,000 respectively.
Lifewave, which had only NIS 3,000 cash at the end of the third quarter of 2011, awaits two injections of cash: NIS 900,000 from controlling shareholder RLB Investments, owned by Yitzhak Kaufman and Reuven Shulman, and NIS 170,000 from an unnamed investor.
The company has already granted several extensions to the two investors, but has not yet received the full amounts that they undertook to invest. At the end of March, Lifewave is due to repay a loan of NIS 1 million Even if it makes the payment, it is not clear how it will finance its continued activity. The company is traded on the Maintenance List, at a market cap of NIS 9 million.
Wound treatment technology company LifeWave Hi-Tech Medical Devices Ltd. (TASE:LIFE), which suffers from severe cash flow difficulties, has failed to meet a payment due to company chairman Haim Ramon, CEO Michel Afargan, and CFO Gal Peleg, even after they forewent part of their salaries and agreed to defer some of the payments to July.
The failure to abide by the amended agreement means that it becomes void, and the three senior managers can again demand their full salaries from the company. In 2010, Ramon’s salary cost totaled about NIS 1 million (mostly in options), while Afargan and Peleg were entitled to salaries costing NIS 1.54 million and NIS 475,000 respectively.
Lifewave, which had only NIS 3,000 cash at the end of the third quarter of 2011, awaits two injections of cash: NIS 900,000 from controlling shareholder RLB Investments, owned by Yitzhak Kaufman and Reuven Shulman, and NIS 170,000 from an unnamed investor.
The company has already granted several extensions to the two investors, but has not yet received the full amounts that they undertook to invest. At the end of March, Lifewave is due to repay a loan of NIS 1 million Even if it makes the payment, it is not clear how it will finance its continued activity. The company is traded on the Maintenance List, at a market cap of NIS 9 million.
Thursday, March 8, 2012
Bethel Finance: IEC workers want NIS 100,000 grant for reforms
www.bethelfinance.com
The workers committee of the Israel Electric Corporation (IEC) (TASE: ELEC.B22) is demanding a one-time payment of NIS 100,000 for each employee in order to agree to the reform plan for the utility. The demand has been raised as part of a counter proposal to the management's proposal on discussions about the reform. The gap in cost surrounding the proposal amounts to NIS 3-5 billion.
Talks over the reform are expected to resume soon after they were broken off at the start of the year. So far agreement has only been reached regarding the first phase of the reform, which would change the company's structure including partial privatization of some of IEC's power stations.
At present the two sides are discussing the streamlining plan led by flexible management, and finding a solution to the company's difficult financial situation. At the heart of the talks is what IEC's 13,000 employees will receive in exchange for agreeing to the reform.
In November, IEC CEO Eli Glickman submitted the management's proposal without coordinating it with the Ministry of Finance and the government. The plan includes mass retirement of 2,000 employees over the age of 50 and who have been at IEC over 25 years. According to the management's proposal these employees would be entitled to redundancy compensation at a rate of 150% at an average cost of NIS 1.65 million per employee totaling NIS 3.5 billion.
Glickman is also proposing financial compensation for relinquishing free electricity benefits, and compensations for employees remaining at the company. Sources close to the negotiations say that the cost of the package could reach NIS 5 billion.
The cost of the proposal of the IEC workers committee, led by national chairman Micky Tzarfati, would be NIS 8-10 billion. At the heart of the proposal are three main demands that the government is currently refusing to sanction. The first is a one-time payment of NIS 100,000 for each employee remaining at IEC after the mass retirement plan is implemented. This is based on the precedent by which port workers were given a payment for their agreement in 2004 to split the Ports Authority.
The second demand is for a significant pension supplement for the employees remaining at the utility to be paid as an annuity. Under this proposal the workers committee would allocate billions of shekels from which employees could receive a monthly supplement of an average NIS 3,000 for their pension.
The workers committee's third demand is to raise the rate of redundancy compensation for the retiring employees from 150% to 180%. This demand is based on the fact that 150% compensation was paid in the past as part of employee's voluntary pension arrangements - without workers having to give anything in exchange.
IEC's workers committee said in response, "The workers committee won't be drawn into conducting negotiations through the media and on the basis of selected data and distorted figures leaked to cause incitement against IEC employees."
"The Ministry of Finance is again trying to make spin on the back of employees in order to cover up its mistakes, which have caused a dramatic rise in the price of electricity and a grave crisis in the electricity sector."
"It would have been better for government representatives to finally call a meeting for talks rather than engaging in chasing after headlines."
The workers committee of the Israel Electric Corporation (IEC) (TASE: ELEC.B22) is demanding a one-time payment of NIS 100,000 for each employee in order to agree to the reform plan for the utility. The demand has been raised as part of a counter proposal to the management's proposal on discussions about the reform. The gap in cost surrounding the proposal amounts to NIS 3-5 billion.
Talks over the reform are expected to resume soon after they were broken off at the start of the year. So far agreement has only been reached regarding the first phase of the reform, which would change the company's structure including partial privatization of some of IEC's power stations.
At present the two sides are discussing the streamlining plan led by flexible management, and finding a solution to the company's difficult financial situation. At the heart of the talks is what IEC's 13,000 employees will receive in exchange for agreeing to the reform.
In November, IEC CEO Eli Glickman submitted the management's proposal without coordinating it with the Ministry of Finance and the government. The plan includes mass retirement of 2,000 employees over the age of 50 and who have been at IEC over 25 years. According to the management's proposal these employees would be entitled to redundancy compensation at a rate of 150% at an average cost of NIS 1.65 million per employee totaling NIS 3.5 billion.
Glickman is also proposing financial compensation for relinquishing free electricity benefits, and compensations for employees remaining at the company. Sources close to the negotiations say that the cost of the package could reach NIS 5 billion.
The cost of the proposal of the IEC workers committee, led by national chairman Micky Tzarfati, would be NIS 8-10 billion. At the heart of the proposal are three main demands that the government is currently refusing to sanction. The first is a one-time payment of NIS 100,000 for each employee remaining at IEC after the mass retirement plan is implemented. This is based on the precedent by which port workers were given a payment for their agreement in 2004 to split the Ports Authority.
The second demand is for a significant pension supplement for the employees remaining at the utility to be paid as an annuity. Under this proposal the workers committee would allocate billions of shekels from which employees could receive a monthly supplement of an average NIS 3,000 for their pension.
The workers committee's third demand is to raise the rate of redundancy compensation for the retiring employees from 150% to 180%. This demand is based on the fact that 150% compensation was paid in the past as part of employee's voluntary pension arrangements - without workers having to give anything in exchange.
IEC's workers committee said in response, "The workers committee won't be drawn into conducting negotiations through the media and on the basis of selected data and distorted figures leaked to cause incitement against IEC employees."
"The Ministry of Finance is again trying to make spin on the back of employees in order to cover up its mistakes, which have caused a dramatic rise in the price of electricity and a grave crisis in the electricity sector."
"It would have been better for government representatives to finally call a meeting for talks rather than engaging in chasing after headlines."
Bethel Finance: Peres urges Google to expand Israel R&D
www.bethelfinance.com
"Israel is a pioneer in R&D, and at Google we have great appreciation for Israeli developers," Google Sergey CEO Brin told President Shimon Peres during his visit to Google Inc's (Nasdaq: GOOG) headquarters in Silicon Valley yesterday. Peres replied, "In Israel, we've learned to look to tomorrow, and the secret of the country's success is in Israel's special brilliant brains, creativity, daring, and chutzpah."
Brin gave Peres a tour of Google's headquarters and showed him a number of developments, beginning with new Google Translate technologies, which can automatically translate entire web pages from Arabic to Hebrew and Yiddish. He also showed Peres Google's new voice recognition capabilities.
Brin gave Peres a virtual 3D global tour on giant Google Earth screens, including Peres' childhood home in Poland, Kibbutz Alumot, which he helped found as a young man, and Jerusalem, as well as tours of the Moon and Mars. Brin showed Peres a prototype of the Google computer operated driverless car, which the company has been developing for several years.
Peres and Brin discussed trends in the global and Israeli economies, and Peres asked his host to expand Google's collaboration with Israeli R&D centers.
Peres today concludes his three days of meetings and events which high-tech and internet leaders in Silicon Valley. He met with Facebook CEO Mark Zuckerberg, and launched a personal Facebook page, attended the Launch Conference for entrepreneurs, angel investors, and venture capitalists, toured the IBM Almaden Research Center, and mingled with global high-tech leaders at a dinner hosted by Cisco Systems CEO John Chambers.
"Israel is a pioneer in R&D, and at Google we have great appreciation for Israeli developers," Google Sergey CEO Brin told President Shimon Peres during his visit to Google Inc's (Nasdaq: GOOG) headquarters in Silicon Valley yesterday. Peres replied, "In Israel, we've learned to look to tomorrow, and the secret of the country's success is in Israel's special brilliant brains, creativity, daring, and chutzpah."
Brin gave Peres a tour of Google's headquarters and showed him a number of developments, beginning with new Google Translate technologies, which can automatically translate entire web pages from Arabic to Hebrew and Yiddish. He also showed Peres Google's new voice recognition capabilities.
Brin gave Peres a virtual 3D global tour on giant Google Earth screens, including Peres' childhood home in Poland, Kibbutz Alumot, which he helped found as a young man, and Jerusalem, as well as tours of the Moon and Mars. Brin showed Peres a prototype of the Google computer operated driverless car, which the company has been developing for several years.
Peres and Brin discussed trends in the global and Israeli economies, and Peres asked his host to expand Google's collaboration with Israeli R&D centers.
Peres today concludes his three days of meetings and events which high-tech and internet leaders in Silicon Valley. He met with Facebook CEO Mark Zuckerberg, and launched a personal Facebook page, attended the Launch Conference for entrepreneurs, angel investors, and venture capitalists, toured the IBM Almaden Research Center, and mingled with global high-tech leaders at a dinner hosted by Cisco Systems CEO John Chambers.
Bethel Finance: Most illegal migrants come through the airport
www.bethelfinance.com
The billions of shekels Israel is spending on building a fence along the border with Egypt to stop the problem of illegal migrants from Africa will not solve the problem. The 2011 report from the Ministry of Interior's Immigration and Population Authority found that 95,000 foreigners entered Israel during the year on tourist visas that have expired.
There are 54,497 illegal migrants that have entered Israel from Egypt while there are 74,778 migrants in Israel with work visas, and a further 14,118 migrants whose work visas have expired.
Of the 95,000 foreigners whose tourist visas have expired 47.8% are from the former Soviet Union. Ministry of Interior officials believe that a large proportion of these illegal aliens are legal Russian-speaking immigrants' relatives who are not entitled to residency rights. The number of illegal migrants whose tourist visas has expired has fallen 6.5% since 2009.
The Immigration and Population Authority is still most concerned about the illegal migrants arriving from Egypt. Their number, which stood at 37,300 at the end of 2010, saw 150% more new entries last year than the previous year. In November and December 2011 alone 8,000 illegal migrants arrived from Egypt. In the past few years, 80% of the illegal migrants from Egypt come from Sudan and Eritrea. The rest come from countries like Gabon, Turkey, Moldavia and Georgia.
The billions of shekels Israel is spending on building a fence along the border with Egypt to stop the problem of illegal migrants from Africa will not solve the problem. The 2011 report from the Ministry of Interior's Immigration and Population Authority found that 95,000 foreigners entered Israel during the year on tourist visas that have expired.
There are 54,497 illegal migrants that have entered Israel from Egypt while there are 74,778 migrants in Israel with work visas, and a further 14,118 migrants whose work visas have expired.
Of the 95,000 foreigners whose tourist visas have expired 47.8% are from the former Soviet Union. Ministry of Interior officials believe that a large proportion of these illegal aliens are legal Russian-speaking immigrants' relatives who are not entitled to residency rights. The number of illegal migrants whose tourist visas has expired has fallen 6.5% since 2009.
The Immigration and Population Authority is still most concerned about the illegal migrants arriving from Egypt. Their number, which stood at 37,300 at the end of 2010, saw 150% more new entries last year than the previous year. In November and December 2011 alone 8,000 illegal migrants arrived from Egypt. In the past few years, 80% of the illegal migrants from Egypt come from Sudan and Eritrea. The rest come from countries like Gabon, Turkey, Moldavia and Georgia.
Bethel Finance: Delek US swings to profit
www.bethelfinance.com
Delek Group Ltd. (TASE: DLEKG) subsidiary Delek US Holdings Inc. (NYSE:DK) doubled its revenue and swung to a net profit in 2011.
Full-year revenue doubled to $7.2 billion in 2011 from $3.76 billion in 2010. Net profit from continuing operations was $158.3 million ($2.78 per share) in 2011, compared with a net loss from continuing operations of $79.9 million in 2010.
For the fourth quarter, revenue rose to $2.0 billion from $989.5 million for the corresponding quarter. GAAP-based net loss from continuing operations narrowed 12-fold to $6 million (($0.10 per share) for the fourth quarter of 2011 from $70.9 million for the corresponding quarter of 2010. Non-GAAP net loss from continuing operations was $4.5 million, or ($0.07 per share).
Delek US refining revenue from its Tyler refinery in Texas, and El Dorado in Arkansas rose to $30.7 million for the fourth quarter from $11.7 million for the corresponding quarter. Tyler refinery boosted production to 63,722 barrels per day in the fourth quarter from 55,318 barrels per day in the corresponding quarter, and boosted sales to 63,211 barrels per day from 54,405 barrels per day. El Dorado's production was 82,468 barrels per day during the fourth quarter and its sales were 75,694 barrels per day
Delek US completed three strategic acquisitions during the fourth quarter of 2011 and in early 2012: Paline Pipeline Company LLC, which owns a crude oil pipeline network in Texas for $50 million from Ergon Terminaling Inc.; the Nettleton pipeline network to the company's refinery in Tyler, Texas, for $12.3 million, and the Big Sandy product terminal and refined products pipelines in Texas for $11 million.
Delek had $225.9 million in cash and $432.6 million in debt at the end of 2011, giving a net debt of $206.7 million
Delek US president and CEO Uzi Yemin said, "During 2011, we more than doubled our production capacity with the acquisition of a second refinery and significantly increased our portfolio of logistics assets in the Mid-Continent region. Even after funding two acquisitions last year, we managed to reduce our net debt outstanding by $40 million, while continuing to return value to our shareholders through a combination of regular and special cash dividends."
Looking ahead, Yemin said, "During the first quarter 2012, Mid-Continent and Gulf Coast refining economics have improved when compared to the prior-year period, providing a solid start to what could be another strong year."
Delek US's share price rose 3.8% yesterday to $13.55 billion, giving $786 million
Delek Group Ltd. (TASE: DLEKG) subsidiary Delek US Holdings Inc. (NYSE:DK) doubled its revenue and swung to a net profit in 2011.
Full-year revenue doubled to $7.2 billion in 2011 from $3.76 billion in 2010. Net profit from continuing operations was $158.3 million ($2.78 per share) in 2011, compared with a net loss from continuing operations of $79.9 million in 2010.
For the fourth quarter, revenue rose to $2.0 billion from $989.5 million for the corresponding quarter. GAAP-based net loss from continuing operations narrowed 12-fold to $6 million (($0.10 per share) for the fourth quarter of 2011 from $70.9 million for the corresponding quarter of 2010. Non-GAAP net loss from continuing operations was $4.5 million, or ($0.07 per share).
Delek US refining revenue from its Tyler refinery in Texas, and El Dorado in Arkansas rose to $30.7 million for the fourth quarter from $11.7 million for the corresponding quarter. Tyler refinery boosted production to 63,722 barrels per day in the fourth quarter from 55,318 barrels per day in the corresponding quarter, and boosted sales to 63,211 barrels per day from 54,405 barrels per day. El Dorado's production was 82,468 barrels per day during the fourth quarter and its sales were 75,694 barrels per day
Delek US completed three strategic acquisitions during the fourth quarter of 2011 and in early 2012: Paline Pipeline Company LLC, which owns a crude oil pipeline network in Texas for $50 million from Ergon Terminaling Inc.; the Nettleton pipeline network to the company's refinery in Tyler, Texas, for $12.3 million, and the Big Sandy product terminal and refined products pipelines in Texas for $11 million.
Delek had $225.9 million in cash and $432.6 million in debt at the end of 2011, giving a net debt of $206.7 million
Delek US president and CEO Uzi Yemin said, "During 2011, we more than doubled our production capacity with the acquisition of a second refinery and significantly increased our portfolio of logistics assets in the Mid-Continent region. Even after funding two acquisitions last year, we managed to reduce our net debt outstanding by $40 million, while continuing to return value to our shareholders through a combination of regular and special cash dividends."
Looking ahead, Yemin said, "During the first quarter 2012, Mid-Continent and Gulf Coast refining economics have improved when compared to the prior-year period, providing a solid start to what could be another strong year."
Delek US's share price rose 3.8% yesterday to $13.55 billion, giving $786 million
Bethel Finance: Railways staff to strike development work
www.bethelfinance.com
This morning Israel Railways workers committee called a wildcat strike of development work starting tomorrow. As a result lines due to be closed for the development and maintenance of lines will now remain open.
Histadrut chairman Ofer Eini had instructed railway workers not to cooperate with the government's planned railways reform. However, due to fears of a backlash from passengers if services were again strikebound, the workers preferred to suspend development work.
Histradrut transport workers association chairman Avi Edri said, "At this stage we have chosen to impose immediate sanctions in a way that does not harm passengers. We call on the minister of transport and Israel Railways management to stop escalating the situation and immediately return to the negotiating table so that we won't need to take additional action."
Histadrut chairman Ofer Eini said, "The Israel Railways board continues to take unilateral steps and escalate work relations. Railways employees will not cooperate with the reform and that means there will be no reform."
This morning Israel Railways workers committee called a wildcat strike of development work starting tomorrow. As a result lines due to be closed for the development and maintenance of lines will now remain open.
Histadrut chairman Ofer Eini had instructed railway workers not to cooperate with the government's planned railways reform. However, due to fears of a backlash from passengers if services were again strikebound, the workers preferred to suspend development work.
Histradrut transport workers association chairman Avi Edri said, "At this stage we have chosen to impose immediate sanctions in a way that does not harm passengers. We call on the minister of transport and Israel Railways management to stop escalating the situation and immediately return to the negotiating table so that we won't need to take additional action."
Histadrut chairman Ofer Eini said, "The Israel Railways board continues to take unilateral steps and escalate work relations. Railways employees will not cooperate with the reform and that means there will be no reform."
Bethel Finance: Consumer goods prices up 18% in Israel in 2 years
www.bethelfinance.com
Prices of fast-moving consumer goods (FMCG) rose by an average of 18%in Israel in less than two years, between January 2010 and September 2011. Conversely, prices of FMCG's fell by 5.2% in the US over the same period, according to a global Nielsen study. FMCG's include food, beverages, cosmetics, and home cleaning supplies.
While prices of food and consumer goods in the US fell steadily from one quarter to the next, except for the first quarter of 2010, prices in Israel rose steadily throughout the period. FMCG prices in Europe rose by 22% during the period of the study, even faster than in Israel.
Consumer goods prices in Israel kept pace with the rise in Europe until the outbreak of the Cottage Cheese Protest last summer, which slowed the rate of price increases in the third quarter of 2011, resulting in a gap emerging with prices in Europe. Despite the protest, FMCG prices in Israel still rose by an average of 2.1% in the third quarter.
The rise in FMCG prices is not the whole story. According to media reports about price comparisons in the past months, prices in Israel are higher than in the US and Europe. Notwithstanding the rising prices in Europe, consumer goods are still much cheaper than in Israel. The differences are especially wide for food brands and international consumer product brands. One example is Gillette shaving foam, which costs considerably more in Israel than in Europe.
Other examples, according to Numbeo cost of living comparison website: a liter of milk in Israel costs 39% more than in the US and 7.3% more than in the UK; and a dozen eggs costs 77% more in Israel than in the US and 10.2% more than in the UK.
In Israel, the lack of competition and strong brands prevent real competition, resulting in high prices. It is no wonder that politicians submit private member bills in the Knesset, some of which are decried as populist, to try and restrain market prices. The latest bill, called the "Shame Law", by MK Shai Hermesh (Kadima), would require retailers to also mark the purchase price of a product on the label.
Prices of fast-moving consumer goods (FMCG) rose by an average of 18%in Israel in less than two years, between January 2010 and September 2011. Conversely, prices of FMCG's fell by 5.2% in the US over the same period, according to a global Nielsen study. FMCG's include food, beverages, cosmetics, and home cleaning supplies.
While prices of food and consumer goods in the US fell steadily from one quarter to the next, except for the first quarter of 2010, prices in Israel rose steadily throughout the period. FMCG prices in Europe rose by 22% during the period of the study, even faster than in Israel.
Consumer goods prices in Israel kept pace with the rise in Europe until the outbreak of the Cottage Cheese Protest last summer, which slowed the rate of price increases in the third quarter of 2011, resulting in a gap emerging with prices in Europe. Despite the protest, FMCG prices in Israel still rose by an average of 2.1% in the third quarter.
The rise in FMCG prices is not the whole story. According to media reports about price comparisons in the past months, prices in Israel are higher than in the US and Europe. Notwithstanding the rising prices in Europe, consumer goods are still much cheaper than in Israel. The differences are especially wide for food brands and international consumer product brands. One example is Gillette shaving foam, which costs considerably more in Israel than in Europe.
Other examples, according to Numbeo cost of living comparison website: a liter of milk in Israel costs 39% more than in the US and 7.3% more than in the UK; and a dozen eggs costs 77% more in Israel than in the US and 10.2% more than in the UK.
In Israel, the lack of competition and strong brands prevent real competition, resulting in high prices. It is no wonder that politicians submit private member bills in the Knesset, some of which are decried as populist, to try and restrain market prices. The latest bill, called the "Shame Law", by MK Shai Hermesh (Kadima), would require retailers to also mark the purchase price of a product on the label.
Bethel Finance: Eliahu: I'm returning to my insurance roots
www.bethelfinance.com
"Yes I'm glad," Shlomo Eliahu told acquaintances today in his office in Tel Aviv's Eliahu Tower."It's true that I had to summon strength and take a decision to back down from Bank Leumi, the dream of my life, but I do this gladly, and I'm returning to my roots and the place where my expertise lies and that I most understand. I'm buying the largest, most stable and best managed insurance company."
Eliahu, the owner of Eliahu Insurance Ltd., was speaking today after news broke that he was buying the 69.13% stake of Italy's Assicurazioni Generali SpA (BIT: GASI) in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL). He has reportedly acquired control of Migdal for NIS 4.2 billion, reflecting a company value of NIS 6 billion, a 13% premium on its market cap of NIS 5.4 billion.
Immediately after the regulators have their say and approve the deal, Eliahu will return to routine and intensive work in the field that he knows best: insurance. Those familiar with Eliahu's business and insurance track record know that a short time after control and management of Migdal have passed into his hands the entire insurance market will look and behave differently, or in today's parlance a huge consumer revolution. It was Avner who brought about the Avner insurance cartel for compulsory vehicle insurance. The result was a new world of true competition and a steep fall in prices.
Meanwhile, Eliahu must wait for Generali's signature and approval from the Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig, Antitrust Authority director general Prof. David Gilo, and Supervisor of Banks Dudu Zaken. The deal, put together over the past two weeks, and signed today by Shlomo Eliahu, will be implemented by his private holding company. The money too, 15% of the deal, was deposited with trustees today from the private accounts of Eliahu. After discussions with the regulators a decision will be taken together with them on exactly how Eliahu's investment in Migdal will be held.
The Supervisor of Capital Markets, Insurance and Savings will not allow Eliahu to own two insurance companies - Eliahu Insurance and Migdal. Therefore, Eliahu will have to make what will be a tough decision for him and part with the company he set up and created his wealth. Furthermore, according to the instructions of the Bachar Commission, Eliahu will not be permitted to own both a large insurance and finance company, and a large bank. He will be required to re-order his holdings and it is clear what he will do. He will sell his stakes in Union Bank of Israel (TASE: UNON) and Bank Leumi (TASE: LUMI). From precedents, it is safe to assume that the regulators will give him time to buy Migdal and then reorganize his business. His shares in Union Bank and Bank Leumi will be transferred to a trustee or place in to a situation of "dormant rights."
In addition, in coordination with the regulator, Eliahu will formulate a position on whether he will independently own Migdal or bring in a partner. In the past Eliahu has been in talks with various groups, including foreigners, on forming a controlling core for Bank Leumi. Such groups of reinsurers could join Eliahu at Migdal over time.
In a statement today Eliahu said, "I am aware that I will need to reach understandings with the Supervisor of the Capital Market, Insurance and Savings regarding the continuation of the activities of Eilahu Insurance Ltd. as well as my holdings in Bank Leumi and Union Bank. In order to receive a license for control of Migdal, the largest insurance company in Israel. This is an exciting moment for me and for my family. The deal will be completed with receipt of the required approvals from the Supervisor of the Capital Market, Insurance and Savings."
"Yes I'm glad," Shlomo Eliahu told acquaintances today in his office in Tel Aviv's Eliahu Tower."It's true that I had to summon strength and take a decision to back down from Bank Leumi, the dream of my life, but I do this gladly, and I'm returning to my roots and the place where my expertise lies and that I most understand. I'm buying the largest, most stable and best managed insurance company."
Eliahu, the owner of Eliahu Insurance Ltd., was speaking today after news broke that he was buying the 69.13% stake of Italy's Assicurazioni Generali SpA (BIT: GASI) in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL). He has reportedly acquired control of Migdal for NIS 4.2 billion, reflecting a company value of NIS 6 billion, a 13% premium on its market cap of NIS 5.4 billion.
Immediately after the regulators have their say and approve the deal, Eliahu will return to routine and intensive work in the field that he knows best: insurance. Those familiar with Eliahu's business and insurance track record know that a short time after control and management of Migdal have passed into his hands the entire insurance market will look and behave differently, or in today's parlance a huge consumer revolution. It was Avner who brought about the Avner insurance cartel for compulsory vehicle insurance. The result was a new world of true competition and a steep fall in prices.
Meanwhile, Eliahu must wait for Generali's signature and approval from the Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig, Antitrust Authority director general Prof. David Gilo, and Supervisor of Banks Dudu Zaken. The deal, put together over the past two weeks, and signed today by Shlomo Eliahu, will be implemented by his private holding company. The money too, 15% of the deal, was deposited with trustees today from the private accounts of Eliahu. After discussions with the regulators a decision will be taken together with them on exactly how Eliahu's investment in Migdal will be held.
The Supervisor of Capital Markets, Insurance and Savings will not allow Eliahu to own two insurance companies - Eliahu Insurance and Migdal. Therefore, Eliahu will have to make what will be a tough decision for him and part with the company he set up and created his wealth. Furthermore, according to the instructions of the Bachar Commission, Eliahu will not be permitted to own both a large insurance and finance company, and a large bank. He will be required to re-order his holdings and it is clear what he will do. He will sell his stakes in Union Bank of Israel (TASE: UNON) and Bank Leumi (TASE: LUMI). From precedents, it is safe to assume that the regulators will give him time to buy Migdal and then reorganize his business. His shares in Union Bank and Bank Leumi will be transferred to a trustee or place in to a situation of "dormant rights."
In addition, in coordination with the regulator, Eliahu will formulate a position on whether he will independently own Migdal or bring in a partner. In the past Eliahu has been in talks with various groups, including foreigners, on forming a controlling core for Bank Leumi. Such groups of reinsurers could join Eliahu at Migdal over time.
In a statement today Eliahu said, "I am aware that I will need to reach understandings with the Supervisor of the Capital Market, Insurance and Savings regarding the continuation of the activities of Eilahu Insurance Ltd. as well as my holdings in Bank Leumi and Union Bank. In order to receive a license for control of Migdal, the largest insurance company in Israel. This is an exciting moment for me and for my family. The deal will be completed with receipt of the required approvals from the Supervisor of the Capital Market, Insurance and Savings."
Bethel Finance: Mari B rig sinking faster than expected
www.bethelfinance.com
The Ministry of Energy and Water Resources is worried about the faster-than-expected sinking of the Mari B natural gas production rig at Yam Tethys, Israel's only supply of natural gas. Rig operator Noble Energy Inc. (NYSE: NBL) says that there is no immediate danger to the rig, but the ministry nonetheless secretly hired global energy consultancy firm RPS to carry out an independent assessment of the rig's condition and safety.
The ministry's Petroleum Department told RPS, "It is vital for the ministry to obtain an independent opinion from an external inspector that is not based on assessments by Yam Tethys" in view of the critical importance of the facility.
Yam Tethys' depleting Mari B reservoir is currently the sole natural gas supplier to Israel Electric Corporation (IEC) (TASE: ELEC.B22) and the Israeli market. The reservoir's reserves have plummeted due to over-pumping, which prompted Minister of Energy Uzi Landau to order IEC to keep as much gas as possible in the reservoir for peak demand expected this summer. IEC has warned the Ministry of Finance that if gas deliveries from Yam Tethys come to a complete halt, it will need a NIS 10 billion supplement to buy alternative fuels, such as diesel and fuel oil, or else there will not be enough electricity. This demand will raise the electricity rate beyond the 6% hike already set for 2012.
Noble and Delek Group Ltd. (TASE: DLEKG) produce gas from Yam Tethys's Mari B via a platform located on the border of Israel's territorial waters. Unlike floating rigs, the Mari B platform is tethered to the seabed. Noble Energy says that the rig will sink as the natural gas reservoir beneath is depleted, but the rate of sinking in recent months has been faster than expected.
Gas is also seeping out in the sea through cracks in the strata near the rig. Sources inform ''Globes'' that that the rig's rapid sinking and the gas seepage has already caused instability in the production wells, rendering some of them useless. Noble Energy staff told Petroleum Department officials that there was no immediate risk to the production platform.
The Mari B production rig is due to play important roles in the future. When pumping at Mari B is finished, surplus gas from the deepwater Tamar reservoir will be sent via pipeline to Mari B to replenish the reservoir, turning in into Israel's strategic reserve, as well as enabling the Tamar partners - Noble Energy, Delek, and Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) - to manage natural gas demand more efficiently.
The Ministry of Energy and Water Resources is worried about the faster-than-expected sinking of the Mari B natural gas production rig at Yam Tethys, Israel's only supply of natural gas. Rig operator Noble Energy Inc. (NYSE: NBL) says that there is no immediate danger to the rig, but the ministry nonetheless secretly hired global energy consultancy firm RPS to carry out an independent assessment of the rig's condition and safety.
The ministry's Petroleum Department told RPS, "It is vital for the ministry to obtain an independent opinion from an external inspector that is not based on assessments by Yam Tethys" in view of the critical importance of the facility.
Yam Tethys' depleting Mari B reservoir is currently the sole natural gas supplier to Israel Electric Corporation (IEC) (TASE: ELEC.B22) and the Israeli market. The reservoir's reserves have plummeted due to over-pumping, which prompted Minister of Energy Uzi Landau to order IEC to keep as much gas as possible in the reservoir for peak demand expected this summer. IEC has warned the Ministry of Finance that if gas deliveries from Yam Tethys come to a complete halt, it will need a NIS 10 billion supplement to buy alternative fuels, such as diesel and fuel oil, or else there will not be enough electricity. This demand will raise the electricity rate beyond the 6% hike already set for 2012.
Noble and Delek Group Ltd. (TASE: DLEKG) produce gas from Yam Tethys's Mari B via a platform located on the border of Israel's territorial waters. Unlike floating rigs, the Mari B platform is tethered to the seabed. Noble Energy says that the rig will sink as the natural gas reservoir beneath is depleted, but the rate of sinking in recent months has been faster than expected.
Gas is also seeping out in the sea through cracks in the strata near the rig. Sources inform ''Globes'' that that the rig's rapid sinking and the gas seepage has already caused instability in the production wells, rendering some of them useless. Noble Energy staff told Petroleum Department officials that there was no immediate risk to the production platform.
The Mari B production rig is due to play important roles in the future. When pumping at Mari B is finished, surplus gas from the deepwater Tamar reservoir will be sent via pipeline to Mari B to replenish the reservoir, turning in into Israel's strategic reserve, as well as enabling the Tamar partners - Noble Energy, Delek, and Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) - to manage natural gas demand more efficiently.
Bethel Finance: Utilities Authority to discuss 6% electricity rate hike
www.bethelfinance.com
The Public Utilities Authority (Electricity) will discuss the 6% electricity rate hike for 2012 on Monday. The Authority doubts that a decision will made at the meeting, and that it will have to hold more meetings.
Since the hearing on the rate hike was announced on January 26, numerous queries by consumer organizations and other parties have been submitted to the Public Utilities Authority. The proposed rate hike is the third in the past year, and follows a 15% increase in electricity rates in 2011.
The plan to spread the electricity rate hikes over several years was in response to Israel Electric Corporation's (IEC) (TASE: ELEC.B22) demand for a 30% rate hike to cover the extra cost of diesel and fuel oil to make up for the shortage of cheaper natural gas. Electricity rates are due to rise by 6% in 2012, 2.6% in 2013, and 3.7% in 2014. However, the rate hikes could be greater if natural gas deliveries come to a complete halt.
Halts in gas deliveries from Egypt have forced IEC to double its 2012 fuel procurement budget from NIS 9 billion to NIS 19 billion, and it is demanding that most of this extra cost be paid by consumers through electricity rate hikes. In addition to agreeing to a lower rate hike, the Ministry of Finance agreed to give IEC state guarantees to raise NIS 3 billion through bond issues on the TASE.
The Public Utilities Authority (Electricity) will discuss the 6% electricity rate hike for 2012 on Monday. The Authority doubts that a decision will made at the meeting, and that it will have to hold more meetings.
Since the hearing on the rate hike was announced on January 26, numerous queries by consumer organizations and other parties have been submitted to the Public Utilities Authority. The proposed rate hike is the third in the past year, and follows a 15% increase in electricity rates in 2011.
The plan to spread the electricity rate hikes over several years was in response to Israel Electric Corporation's (IEC) (TASE: ELEC.B22) demand for a 30% rate hike to cover the extra cost of diesel and fuel oil to make up for the shortage of cheaper natural gas. Electricity rates are due to rise by 6% in 2012, 2.6% in 2013, and 3.7% in 2014. However, the rate hikes could be greater if natural gas deliveries come to a complete halt.
Halts in gas deliveries from Egypt have forced IEC to double its 2012 fuel procurement budget from NIS 9 billion to NIS 19 billion, and it is demanding that most of this extra cost be paid by consumers through electricity rate hikes. In addition to agreeing to a lower rate hike, the Ministry of Finance agreed to give IEC state guarantees to raise NIS 3 billion through bond issues on the TASE.
Wednesday, March 7, 2012
Bethel Finance: Zehavit Cohen and Psagot chairman clash over Psagot CEO
www.bethelfinance.com
"Globes" report yesterday that Apax Israel CEO Zehavit Cohen wants to replace Psagot Investment House Ltd. CEO Ronen Tov has raised a storm in Israel's capital market in general and at Psagot itself.
However, sources inform "Globes" that Psagot chairman Ehud Shapira responded this morning by swiftly calling a meeting of Psagot's senior management including Tov to tell them that it was 'business as usual." He reportedly promised them, "as representative of the owners, I tell you that Ronen Tov is staying."
Some market sources believe that Shapira coordinated the move with Cohen in order to calm the situation at the investment house. Nor do Shapira's assurances necessarily mean that Tov will remain as CEO, while Cohen still sees him being replaced.
Psagot has been buffeted in recent years and the last thing it needs is an additional shaking up. An investigation two years ago by the Israel Securities Authority and the changeover in control at Psagot to Apax resulted in the removal of the highly esteemed CEO Roy Vermus. Then there has been huge public criticism at the high level of management fees. Other woes include the departure of senior managers and the 40% fall in the value of Psagot in Apax's financial report and dozens of employees are expected to be cut. Now comes the uncertainty surrounding Tov's future.
Sources close to Cohen say that she is disappointed that Tov did not stand in the forefront of the struggle against lowering management fees for provident funds. The recent decision to limit them is expected to hit Psagot's income. p>Tov and his staff actually did a lot on this matter: they prepared analyses and forecasts; they transferred data to the Ministry of Finance and to MKs; they worked behind the scenes through familiar channels; and they published articles. Except that, in the end, the decision on management fees bypassed the Ministry of Finance, so it's not clear how much Tov could have influenced the decision.
Unreasonable expectations to create value
There was sharp criticism of Cohen today in the capital market that she was considering replacing Tov after just one year in the position. There was agreement in the market today: Ronen Tov has not failed in his job; Psagot has not crashed in the past year, and has not suffered from heavy withdrawals. The investment house has been operating more or less in line with market trends in areas where the market has suffered from withdrawals, so has Psagot, and in areas where capital was raised, Psagot was also successful.
So why then did Apax write off 40% of Psagot's value in its most recent financial report? The reason is the original inflated price at which control of the investment house was bought (at a market cap of NIS 2.7 billion), which afterwards was revalued upwards to NIS 3.7 billion.
Market sources claim that Cohen set unreasonable goals for Tov: to create value for Psagot, when the current value listed on Apax's books was already exaggerated. At the same time, the capital market experienced a crisis, and regulations were eroding management fees. No manager can create value under these conditions, and certainly not after one year.
On the other hand, Tov knew what he was getting into. Cohen's aggressive style is well known, as well as her tendency to fire managers without thinking twice. This is what she did at Tnuva Food Industries Ltd. where she replaced two CEOs, and this is what she did to Vermus at Psagot, when along with the compliments she heaped on him, she did not hesitate to oust him the moment she understood that he might be an obstacle to close the acquisition of the investment house.
Market sources also believe that despite Cohen's desire to find a replacement for Tov, it will not be simple to find someone else like him. Cohen's image of a tough and involved manager, who has no problem firing a CEO that she herself appointed, is only getting stronger. Whoever she brings in to replace Tov will be fully aware of what happened to his predecessor.
"Globes" report yesterday that Apax Israel CEO Zehavit Cohen wants to replace Psagot Investment House Ltd. CEO Ronen Tov has raised a storm in Israel's capital market in general and at Psagot itself.
However, sources inform "Globes" that Psagot chairman Ehud Shapira responded this morning by swiftly calling a meeting of Psagot's senior management including Tov to tell them that it was 'business as usual." He reportedly promised them, "as representative of the owners, I tell you that Ronen Tov is staying."
Some market sources believe that Shapira coordinated the move with Cohen in order to calm the situation at the investment house. Nor do Shapira's assurances necessarily mean that Tov will remain as CEO, while Cohen still sees him being replaced.
Psagot has been buffeted in recent years and the last thing it needs is an additional shaking up. An investigation two years ago by the Israel Securities Authority and the changeover in control at Psagot to Apax resulted in the removal of the highly esteemed CEO Roy Vermus. Then there has been huge public criticism at the high level of management fees. Other woes include the departure of senior managers and the 40% fall in the value of Psagot in Apax's financial report and dozens of employees are expected to be cut. Now comes the uncertainty surrounding Tov's future.
Sources close to Cohen say that she is disappointed that Tov did not stand in the forefront of the struggle against lowering management fees for provident funds. The recent decision to limit them is expected to hit Psagot's income. p>Tov and his staff actually did a lot on this matter: they prepared analyses and forecasts; they transferred data to the Ministry of Finance and to MKs; they worked behind the scenes through familiar channels; and they published articles. Except that, in the end, the decision on management fees bypassed the Ministry of Finance, so it's not clear how much Tov could have influenced the decision.
Unreasonable expectations to create value
There was sharp criticism of Cohen today in the capital market that she was considering replacing Tov after just one year in the position. There was agreement in the market today: Ronen Tov has not failed in his job; Psagot has not crashed in the past year, and has not suffered from heavy withdrawals. The investment house has been operating more or less in line with market trends in areas where the market has suffered from withdrawals, so has Psagot, and in areas where capital was raised, Psagot was also successful.
So why then did Apax write off 40% of Psagot's value in its most recent financial report? The reason is the original inflated price at which control of the investment house was bought (at a market cap of NIS 2.7 billion), which afterwards was revalued upwards to NIS 3.7 billion.
Market sources claim that Cohen set unreasonable goals for Tov: to create value for Psagot, when the current value listed on Apax's books was already exaggerated. At the same time, the capital market experienced a crisis, and regulations were eroding management fees. No manager can create value under these conditions, and certainly not after one year.
On the other hand, Tov knew what he was getting into. Cohen's aggressive style is well known, as well as her tendency to fire managers without thinking twice. This is what she did at Tnuva Food Industries Ltd. where she replaced two CEOs, and this is what she did to Vermus at Psagot, when along with the compliments she heaped on him, she did not hesitate to oust him the moment she understood that he might be an obstacle to close the acquisition of the investment house.
Market sources also believe that despite Cohen's desire to find a replacement for Tov, it will not be simple to find someone else like him. Cohen's image of a tough and involved manager, who has no problem firing a CEO that she herself appointed, is only getting stronger. Whoever she brings in to replace Tov will be fully aware of what happened to his predecessor.
Bethel Finance: Tower Records, Blockbuster closing Israel stores
www.bethelfinance.com
Technology developments and pirate downloading have hit NMC Music Ltd. (TASE: NMC) hard. Sources inform ''Globes'' that over the past year, NMC has closed 14 Tower Records stores and six branches of the Blockbuster chain, which has completely closed down operations. 200 employees have been fired from the two chains.
Tower Records sells music CD's, recording products, computer games, and computer game consoles. The chain currently has only seven stores, compared with 40 stores that it had at its height. For the moment, these seven stores are profitable. Blockbuster rented and sold movies, and at its height had 40 branches.
Another area in which NMC operates and which has been only slightly downsized, is videomats. The company operates 80 videomat dispensers throughout Israel.
NMC, controlled by Moshe Edri, acquired the two chains at the onset of the market turnaround. It acquired Blockbuster at the end of 2008 and Tower Records in April 2009 as part of the Hed Arzi deal.
Both chains caused NMC heavy losses estimated at more than NIS 40 million. In 2009, it had a loss of NIS 11.5 million. In 2010, losses increased to NIS 21 million, and in the first quarter of 2011 alone, losses reached NIS 3.4 million.
NMC United CEO Pnina Edri attributes the failure of the chains to, "the difficult conditions that the music industry is suffering, and to fraudulent copying and downloading in Israel at unprecedented levels compared with other countries, which harms music disc stores as well as the artists themselves."
Edri also blames, "the law enforcement authorities for not doing enough to stop the phenomenon that is insulting to musicians and investors, and which is basically stealing their art."
Edri continues, "The Tower Records stores that are currently in operation are profitable. We believe in this chain and wish to continue selling music discs."
In an effort to counteract this phenomenon and in cooperation with Walla Communications Ltd. (TASE: WALA), NMC launched Walla Music, which enables surfers to legally download music for a small monthly fee. NMC also recently launched a Wall Music app for androids and iPhones.
Edri believes that the company growth will come from a new office to represent artists in stage performances. NMC launched this service six months ago and is currently representing leading artists and hopes to expand this activity.
Technology developments and pirate downloading have hit NMC Music Ltd. (TASE: NMC) hard. Sources inform ''Globes'' that over the past year, NMC has closed 14 Tower Records stores and six branches of the Blockbuster chain, which has completely closed down operations. 200 employees have been fired from the two chains.
Tower Records sells music CD's, recording products, computer games, and computer game consoles. The chain currently has only seven stores, compared with 40 stores that it had at its height. For the moment, these seven stores are profitable. Blockbuster rented and sold movies, and at its height had 40 branches.
Another area in which NMC operates and which has been only slightly downsized, is videomats. The company operates 80 videomat dispensers throughout Israel.
NMC, controlled by Moshe Edri, acquired the two chains at the onset of the market turnaround. It acquired Blockbuster at the end of 2008 and Tower Records in April 2009 as part of the Hed Arzi deal.
Both chains caused NMC heavy losses estimated at more than NIS 40 million. In 2009, it had a loss of NIS 11.5 million. In 2010, losses increased to NIS 21 million, and in the first quarter of 2011 alone, losses reached NIS 3.4 million.
NMC United CEO Pnina Edri attributes the failure of the chains to, "the difficult conditions that the music industry is suffering, and to fraudulent copying and downloading in Israel at unprecedented levels compared with other countries, which harms music disc stores as well as the artists themselves."
Edri also blames, "the law enforcement authorities for not doing enough to stop the phenomenon that is insulting to musicians and investors, and which is basically stealing their art."
Edri continues, "The Tower Records stores that are currently in operation are profitable. We believe in this chain and wish to continue selling music discs."
In an effort to counteract this phenomenon and in cooperation with Walla Communications Ltd. (TASE: WALA), NMC launched Walla Music, which enables surfers to legally download music for a small monthly fee. NMC also recently launched a Wall Music app for androids and iPhones.
Edri believes that the company growth will come from a new office to represent artists in stage performances. NMC launched this service six months ago and is currently representing leading artists and hopes to expand this activity.
Bethel Finance: Foreign residents buy 2 apts in Meier on Rothschild for NIS 22m
www.bethelfinance.com
Foreign residents have bought two apartments in the Meier on Rothschild tower, being built by Berggruen Residential Ltd. (TASE:BRGN.B1) and Hagag Group Real Estate Development Ltd. (TASE: HGG), for NIS 22 million altogether.
One buyer bought two joined apartments to create a 320-square meter five-room apartment on the 19th floor for NIS 14 million. The second buyer bought a 196-square meter three-room apartment on the 15th floor for NIS 8 million. The price of the first apartment reflected a price of NIS 43,700 per square meter; the second apartment cost NIS 41,000 per square meter.
Berggruen Residential CEO Yigal Tzemach said that prices in the building were rising, reflecting progress in construction.
World renowned architect Richard Meier designed the Meier on Rothschild tower, located at the corner of Rothschild Boulevard and Allenby Street in Tel Aviv. The project includes a half-sized Olympic pool, spa, wine cellar, and concierge and guard services.
Foreign residents have bought two apartments in the Meier on Rothschild tower, being built by Berggruen Residential Ltd. (TASE:BRGN.B1) and Hagag Group Real Estate Development Ltd. (TASE: HGG), for NIS 22 million altogether.
One buyer bought two joined apartments to create a 320-square meter five-room apartment on the 19th floor for NIS 14 million. The second buyer bought a 196-square meter three-room apartment on the 15th floor for NIS 8 million. The price of the first apartment reflected a price of NIS 43,700 per square meter; the second apartment cost NIS 41,000 per square meter.
Berggruen Residential CEO Yigal Tzemach said that prices in the building were rising, reflecting progress in construction.
World renowned architect Richard Meier designed the Meier on Rothschild tower, located at the corner of Rothschild Boulevard and Allenby Street in Tel Aviv. The project includes a half-sized Olympic pool, spa, wine cellar, and concierge and guard services.
Bethel Finance: Implant co NLT Spine raises $5.7m
www.bethelfinance.com
Minimally invasive surgery spinal implant developer NLT Spine has raised $5.7 million from existing investors Accelmed and Peregrine Ventures. This brings the total funds raised by the company to $14.5 million.
The Kfar Saba based company reported that the investment from Moshe (Mori) Arkin and Dr. Uri Geiger's Accelmed and Peregrine will be used for the development of its PROW LIF lumbar fusion product line and other products, and to expand its presence in the US market.
NLT Spine was founded by Dr. Tzony Siegal.
NLT Spine products are based on its non-linear core technology, which allows for inserting large implants and instruments through a small incision. NLT Spine plans to officially launch its PROW LIF line and additional products in 2013. The cornerstone of the PROW LIF product line is the PROW FUSION PROW FUSION, which recently received clearance from the US Food and Drug Administration (FDA) and is currently available under limited release.
NLT Spine chairman Dr. Uri Geiger said, “NLT Spine has developed a promising technology platform for effectively performing a wide array of minimally invasive spine procedures.With a wide selection of solutions for a fast growing market and a strong portfolio of issued and pending patents, NLT Spine is positioned for a strong leadership in this market.”
Minimally invasive surgery spinal implant developer NLT Spine has raised $5.7 million from existing investors Accelmed and Peregrine Ventures. This brings the total funds raised by the company to $14.5 million.
The Kfar Saba based company reported that the investment from Moshe (Mori) Arkin and Dr. Uri Geiger's Accelmed and Peregrine will be used for the development of its PROW LIF lumbar fusion product line and other products, and to expand its presence in the US market.
NLT Spine was founded by Dr. Tzony Siegal.
NLT Spine products are based on its non-linear core technology, which allows for inserting large implants and instruments through a small incision. NLT Spine plans to officially launch its PROW LIF line and additional products in 2013. The cornerstone of the PROW LIF product line is the PROW FUSION PROW FUSION, which recently received clearance from the US Food and Drug Administration (FDA) and is currently available under limited release.
NLT Spine chairman Dr. Uri Geiger said, “NLT Spine has developed a promising technology platform for effectively performing a wide array of minimally invasive spine procedures.With a wide selection of solutions for a fast growing market and a strong portfolio of issued and pending patents, NLT Spine is positioned for a strong leadership in this market.”
Bethel Finance: No buyers for 83% of land tenders in January
www.bethelfinance.com
It is a shame that the Israel Land Authority does not publish figures about failed land tenders. A review of tenders published in January and February found that of the lots zoned for 4,497 apartments offered, only lots zoned for 762 were actually sold. A study by the Real Estate Appraisers Association in Israel for "Globes" found 83% of the housing units offered in tenders failed. Most of the failures were in the periphery, including tenders in Dimona, Arabeh, Gedera, Migdal Ha'Emek, Yeruham, Kiryat Gat, and Tiberias.
The problem is that the land marketed does not meet the real needs of Israel's current population dispersal on one hand, or real estate demand, which is centered on central Israel, on the other.
Land marketing policy should be intelligent and meet demand on the basis of location of the target population. Instead, the Land Authority markets land where it can - where there is state land available for sale. A better perspective of the failure of this method is the lack of response by contractors and homebuyers alike, who are in no hurry to leave their current residence for the country's periphery.
The concept ostensibly behind the Land Authority's goal is to develop the periphery, to strengthen the north and south at the expense of Tel Aviv, Haifa, and Jerusalem. This concept holds that higher demand in the periphery will attract quality homebuyers with reasonable prices, ease pressure in high demand areas, and, in the long-term, lower prices in these areas.
This concept is doomed to failure. Firstly, studies show that people do not leave their area of residence when they buy a bigger home. It is therefore necessary to increase the supply of homes proportionately to the population of each district. The demand-supply ratio is balanced in some districts, but here too, policy studies should be the level of towns and the needs of their residents in terms of natural growth and potential for expansion.
Secondly, without the development of transport, health, and education infrastructures, not to mention jobs, culture, and entertainment, in the periphery there is no chance for the Land Authority's concept to succeed. Such development requires budgets and collaboration between ministries to attract companies and organizations to move from their current locations.
Thirdly, there is a reason why building and marketing is limited in high demand areas, such as Tel Aviv, Haifa, and Jerusalem. They are densely populated, with few to no land reserves. These three districts account for 40% of Israel's population, and 24,000 housing units of the total shortfall of 60,000 units. On top of this is Israel's 2% natural population growth rate. So long as there is a housing shortage in the districts with the highest prices, there will no meaningful decline in home prices in either the short or long terms.
Fourthly, if the Land Authority's plans succeed, and the periphery is flooded with apartments and home prices there fall - neither of which is happening now - then the price differential between low-cost and expensive homes will widen and lower prices for second-hand homes. People seeking to buy better homes, which account for 60% of the real estate market, will get less for their homes, and will not be able to meet the higher prices for new ones. The government must therefore create a mix of apartments for all segments of the population.
Real Estate Appraisers Association says that the solution is primarily in a nationwide vacate-and-build plan to provide incentives for both contractors and homeowners. Since there is no available land in high demand areas, this is the only way to greatly increase the housing supply in them. Part of such a plan should include converting office and industrial properties to rental residential properties, and not the luxury apartments currently planned for some of these properties. The strategic location of these properties, the infrastructures in their environs, and the renovations needed are fairly simple to carry out, and could greatly increase the housing supply in a short time because the buildings already exist.
Clearing the housing bottleneck in high demand areas will spread to the periphery and balance housing demand nationwide. This is also the right way to prevent future rises in home prices.
It is a shame that the Israel Land Authority does not publish figures about failed land tenders. A review of tenders published in January and February found that of the lots zoned for 4,497 apartments offered, only lots zoned for 762 were actually sold. A study by the Real Estate Appraisers Association in Israel for "Globes" found 83% of the housing units offered in tenders failed. Most of the failures were in the periphery, including tenders in Dimona, Arabeh, Gedera, Migdal Ha'Emek, Yeruham, Kiryat Gat, and Tiberias.
The problem is that the land marketed does not meet the real needs of Israel's current population dispersal on one hand, or real estate demand, which is centered on central Israel, on the other.
Land marketing policy should be intelligent and meet demand on the basis of location of the target population. Instead, the Land Authority markets land where it can - where there is state land available for sale. A better perspective of the failure of this method is the lack of response by contractors and homebuyers alike, who are in no hurry to leave their current residence for the country's periphery.
The concept ostensibly behind the Land Authority's goal is to develop the periphery, to strengthen the north and south at the expense of Tel Aviv, Haifa, and Jerusalem. This concept holds that higher demand in the periphery will attract quality homebuyers with reasonable prices, ease pressure in high demand areas, and, in the long-term, lower prices in these areas.
This concept is doomed to failure. Firstly, studies show that people do not leave their area of residence when they buy a bigger home. It is therefore necessary to increase the supply of homes proportionately to the population of each district. The demand-supply ratio is balanced in some districts, but here too, policy studies should be the level of towns and the needs of their residents in terms of natural growth and potential for expansion.
Secondly, without the development of transport, health, and education infrastructures, not to mention jobs, culture, and entertainment, in the periphery there is no chance for the Land Authority's concept to succeed. Such development requires budgets and collaboration between ministries to attract companies and organizations to move from their current locations.
Thirdly, there is a reason why building and marketing is limited in high demand areas, such as Tel Aviv, Haifa, and Jerusalem. They are densely populated, with few to no land reserves. These three districts account for 40% of Israel's population, and 24,000 housing units of the total shortfall of 60,000 units. On top of this is Israel's 2% natural population growth rate. So long as there is a housing shortage in the districts with the highest prices, there will no meaningful decline in home prices in either the short or long terms.
Fourthly, if the Land Authority's plans succeed, and the periphery is flooded with apartments and home prices there fall - neither of which is happening now - then the price differential between low-cost and expensive homes will widen and lower prices for second-hand homes. People seeking to buy better homes, which account for 60% of the real estate market, will get less for their homes, and will not be able to meet the higher prices for new ones. The government must therefore create a mix of apartments for all segments of the population.
Real Estate Appraisers Association says that the solution is primarily in a nationwide vacate-and-build plan to provide incentives for both contractors and homeowners. Since there is no available land in high demand areas, this is the only way to greatly increase the housing supply in them. Part of such a plan should include converting office and industrial properties to rental residential properties, and not the luxury apartments currently planned for some of these properties. The strategic location of these properties, the infrastructures in their environs, and the renovations needed are fairly simple to carry out, and could greatly increase the housing supply in a short time because the buildings already exist.
Clearing the housing bottleneck in high demand areas will spread to the periphery and balance housing demand nationwide. This is also the right way to prevent future rises in home prices.
Bethel Finance: Average salary rose 3.8% in 2011
www.bethelfinance.com
The average national gross salary was NIS 8,735 in 2011, 3.8% higher, in current prices, than in 2011. The average salary rose by an annualized 3.9% in the fourth quarter, after rising by 4.1% in the third quarter.
"The average gross salary of Israeli employees rose to NIS 9,055 in December from NIS 8,586 in November, and the average salary of foreign workers rose to NIS 4,863 from NIS 4,713. The average salary of all employees rose to NIS 8,865 in December from NIS 8,406 in November" according with Peres Sailam from Bethel Finance Ltd.
In constant figures, the increase in the average national salary slowed to an annualized 2.5% in fourth quarter from 3.4% in the preceding quarter.
The increase in number of salaried employees slowed to an annualized 1.3% in the fourth quarter, in trend figures, from 1.7% in the preceding quarter. There were 3.045,600 Israeli employees in December, 10,000 more than in November, and 92,500 legal foreign workers, for a total workforce of 3.18 million.
In 2011, the non-financial sector was the biggest sector in terms of jobs, with 1.98 million employees, 65.3% of all employees, and the average salary was NIS 9,010. The public sector was in second place, with 548,700 employees, 18.1% of the total, and with an average salary of NIS 9,335. The financial sector was the smallest sector, with 97,400 employees, 3.2% of the total, but first in terms of pay, with an average salary of NIS 16,340.
The household sector had 208,800 employees in 2011, 6.9% of the total, with an average salary of NIS 4,044, and the non-profit sector had 193,800 employees, 6.4% of the total, with an average salary of NIS 5,468.
For the year as a whole, Israel Electric Corporation (IEC) (TASE: ELEC.B22) and Mekorot National Water Company employees topped the salary rankings, with an average gross salary of NIS 21,913 per month.
The average national gross salary was NIS 8,735 in 2011, 3.8% higher, in current prices, than in 2011. The average salary rose by an annualized 3.9% in the fourth quarter, after rising by 4.1% in the third quarter.
"The average gross salary of Israeli employees rose to NIS 9,055 in December from NIS 8,586 in November, and the average salary of foreign workers rose to NIS 4,863 from NIS 4,713. The average salary of all employees rose to NIS 8,865 in December from NIS 8,406 in November" according with Peres Sailam from Bethel Finance Ltd.
In constant figures, the increase in the average national salary slowed to an annualized 2.5% in fourth quarter from 3.4% in the preceding quarter.
The increase in number of salaried employees slowed to an annualized 1.3% in the fourth quarter, in trend figures, from 1.7% in the preceding quarter. There were 3.045,600 Israeli employees in December, 10,000 more than in November, and 92,500 legal foreign workers, for a total workforce of 3.18 million.
In 2011, the non-financial sector was the biggest sector in terms of jobs, with 1.98 million employees, 65.3% of all employees, and the average salary was NIS 9,010. The public sector was in second place, with 548,700 employees, 18.1% of the total, and with an average salary of NIS 9,335. The financial sector was the smallest sector, with 97,400 employees, 3.2% of the total, but first in terms of pay, with an average salary of NIS 16,340.
The household sector had 208,800 employees in 2011, 6.9% of the total, with an average salary of NIS 4,044, and the non-profit sector had 193,800 employees, 6.4% of the total, with an average salary of NIS 5,468.
For the year as a whole, Israel Electric Corporation (IEC) (TASE: ELEC.B22) and Mekorot National Water Company employees topped the salary rankings, with an average gross salary of NIS 21,913 per month.
Bethel Finance: HOT discontinues cut-rate Internet services
www.bethelfinance.com
HOT Telecommunication Systems Ltd. (TASE: HOT) informed the Ministry of Communications last night that it was stopping marketing Internet services together with its ISP subsidiary HOT-Net. The decision was in response to Ministry of Communications director general Eden Bar Tal's request on the matter to HOT CEO Herzl Ozer.
Bar Tal told Ozer that the Ministry of Communications found that the joint marketing between HOT and its subsidiary was problematic and violated the terms under which HOT.Net had been issued a license.
In its response HOT said that it did not accept the Ministry of Communications interpretation of the licensing conditions but was nevertheless ending the joint marketing.
Other companies in the sector wondered why it took the Ministry of Communications so long to intervene on the cut-price Internet off, which they claimed was a clear violation of licensing terms.
HOT Telecommunication Systems Ltd. (TASE: HOT) informed the Ministry of Communications last night that it was stopping marketing Internet services together with its ISP subsidiary HOT-Net. The decision was in response to Ministry of Communications director general Eden Bar Tal's request on the matter to HOT CEO Herzl Ozer.
Bar Tal told Ozer that the Ministry of Communications found that the joint marketing between HOT and its subsidiary was problematic and violated the terms under which HOT.Net had been issued a license.
In its response HOT said that it did not accept the Ministry of Communications interpretation of the licensing conditions but was nevertheless ending the joint marketing.
Other companies in the sector wondered why it took the Ministry of Communications so long to intervene on the cut-price Internet off, which they claimed was a clear violation of licensing terms.
Bethel Finance: IEC fiber optic venture set for delay
www.bethelfinance.com
The timetable for the Israel Electric Corporation (IEC) (TASE: ELEC.B22) fiber optic venture will probably be extended, after the bidders notified the tenders committee that they cannot submit binding bids together with a financing plan by mid-March, as scheduled. Firstly, there is great uncertainty about the lack of clarity about Minister of Communications Moshe Kahlon's policy, as he simply won't say what he plans to do.
Secondly, none of the bidders can present a financing plan to the banks within such a short time under such uncertain circumstances.
The bidders have raised the issue of conditions related to the venture's viability and about the private investors relations with IEC. The tenders committee told the bidders that regulatory issues related to the telecommunications industry are in the hands of the Ministry of Communications, not the tenders committee, which cannot therefore answer the bidders' questions.
The parties involved in the tender face growing pressure, because IEC realizes that the venture may not find bidders under its current terms. The lack of clarity about developments in the market and questions arising from HOT Telecommunication Systems Ltd's (TASE: HOT) last sales offer have had an effect, and the tender committee members realize that it is up to the Ministry of Communications to move the tender forward.
The bidders support the participation by mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) in the venture, with stakes of up to 10% each, as they will be the venture's potential customers. However, the carriers are demanding in exchange price controls on Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and HOT's infrastructures, and to compel them to sell infrastructures cheaply until the IEC venture deploys its fiber optic network nationwide.
The timetable for the Israel Electric Corporation (IEC) (TASE: ELEC.B22) fiber optic venture will probably be extended, after the bidders notified the tenders committee that they cannot submit binding bids together with a financing plan by mid-March, as scheduled. Firstly, there is great uncertainty about the lack of clarity about Minister of Communications Moshe Kahlon's policy, as he simply won't say what he plans to do.
Secondly, none of the bidders can present a financing plan to the banks within such a short time under such uncertain circumstances.
The bidders have raised the issue of conditions related to the venture's viability and about the private investors relations with IEC. The tenders committee told the bidders that regulatory issues related to the telecommunications industry are in the hands of the Ministry of Communications, not the tenders committee, which cannot therefore answer the bidders' questions.
The parties involved in the tender face growing pressure, because IEC realizes that the venture may not find bidders under its current terms. The lack of clarity about developments in the market and questions arising from HOT Telecommunication Systems Ltd's (TASE: HOT) last sales offer have had an effect, and the tender committee members realize that it is up to the Ministry of Communications to move the tender forward.
The bidders support the participation by mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) in the venture, with stakes of up to 10% each, as they will be the venture's potential customers. However, the carriers are demanding in exchange price controls on Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and HOT's infrastructures, and to compel them to sell infrastructures cheaply until the IEC venture deploys its fiber optic network nationwide.
Bethel Finance: Lichtman, Shani to raise $100-150m VC fund
www.bethelfinance.com
Sources inform ''Globes'' that former NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) CEO Haim Shani, who served a stint as Ministry of Finance director general, and former Microsoft Israel R&D president Moshe Lichtman will try to raise $100-150 million for a venture capital fund. The fund will make investments of a few million dollars into late-stage start ups.
The fund is one of several venture capital funds that are planned to launch in the coming year amid rising reports about the difficulties facing Israeli high-tech start-ups face in raising capital.
Lichtman and Shani are two of Israel's most prominent high tech executives of the past decade, and switching to venture capital is a natural move. They operate in the same milieu, have seniority in the industry, and diversified and rich track records in technology and business that suits them to lead a large venture capital fund that will focus on Israel. In addition, one of Shani's legacies from his brief spell at the Ministry of Finance (from which he quit in July 2011), is the Relative Advantage Plan, which includes government incentives for Israeli financial institutions to invest in Israeli start ups.
Statistics about the establishment of large Israeli high tech companies are not encouraging. No large company has emerged in the past 15 years, with the exception of Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX), despite the surfeit of start-ups sold to global giants. One of the reasons for the dearth is the shortage of capital for late-stage investment, which is fundamentally different from standard venture capital, and characterized by greater conservatism and consequently has lower rates of return.
Figures indicate that Israel has several hundred late-stage companies with more than $20 million in annual sales. These companies often hit the glass ceiling at this size. To reach the next order of magnitude in terms of sales requires an effort that is unfamiliar in local high tech, which specializes in the sale of companies in the earlier stages of their development.
Shani and Lichtman are two Israeli executives who, in theory at least, have this skill. Before his appointment as the Ministry of Finance director general in mid-2009, Shani was the CEO of NICE Systems, one high-tech company that succeeded in growing here. He has experience in managing large workforces, mergers and acquisitions, global sales, and company turnaround. These are all skills that are needed when thinking about companies in the long term.
Lichtman has more than 20 years experience at Microsoft, including in top executive positions, during which he has accumulated critical skills in managing large companies. He has also been an investor for years, both through Microsoft and privately. In the past, he has spoken out against the culture of exits in Israeli high tech, saying, "Entrepreneurship is a wonderful thing, but it isn't astonishing, at least not among people for whom this is already their second or third venture. It's also the incentive obtained from the environment, from all Israeli companies, which see a fast exit as a success."
In an interview with "Globes" a year ago, Lichtman said that Israeli high tech did not lack managerial experience to grow companies here, but that that this was simply not on the agenda of entrepreneurs and investors. "People in Israel aren’t challenged in thinking to found a great company," he said. "There are 120,000 people in Israeli high tech, and it's not possible that we lack the people who can grow great companies."
Lichtman now plans to play an active role in changing this culture.
Lichtman said in response today, "Haim Shani and I have known each other for a very long time, and we both have many years in high tech. The future of the industry in Israel is close to our hearts, especially the ability of the industry to create large companies. We're in the very advanced stages of figuring out ways to help create large Israeli high tech companies."
Sources inform ''Globes'' that former NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) CEO Haim Shani, who served a stint as Ministry of Finance director general, and former Microsoft Israel R&D president Moshe Lichtman will try to raise $100-150 million for a venture capital fund. The fund will make investments of a few million dollars into late-stage start ups.
The fund is one of several venture capital funds that are planned to launch in the coming year amid rising reports about the difficulties facing Israeli high-tech start-ups face in raising capital.
Lichtman and Shani are two of Israel's most prominent high tech executives of the past decade, and switching to venture capital is a natural move. They operate in the same milieu, have seniority in the industry, and diversified and rich track records in technology and business that suits them to lead a large venture capital fund that will focus on Israel. In addition, one of Shani's legacies from his brief spell at the Ministry of Finance (from which he quit in July 2011), is the Relative Advantage Plan, which includes government incentives for Israeli financial institutions to invest in Israeli start ups.
Statistics about the establishment of large Israeli high tech companies are not encouraging. No large company has emerged in the past 15 years, with the exception of Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX), despite the surfeit of start-ups sold to global giants. One of the reasons for the dearth is the shortage of capital for late-stage investment, which is fundamentally different from standard venture capital, and characterized by greater conservatism and consequently has lower rates of return.
Figures indicate that Israel has several hundred late-stage companies with more than $20 million in annual sales. These companies often hit the glass ceiling at this size. To reach the next order of magnitude in terms of sales requires an effort that is unfamiliar in local high tech, which specializes in the sale of companies in the earlier stages of their development.
Shani and Lichtman are two Israeli executives who, in theory at least, have this skill. Before his appointment as the Ministry of Finance director general in mid-2009, Shani was the CEO of NICE Systems, one high-tech company that succeeded in growing here. He has experience in managing large workforces, mergers and acquisitions, global sales, and company turnaround. These are all skills that are needed when thinking about companies in the long term.
Lichtman has more than 20 years experience at Microsoft, including in top executive positions, during which he has accumulated critical skills in managing large companies. He has also been an investor for years, both through Microsoft and privately. In the past, he has spoken out against the culture of exits in Israeli high tech, saying, "Entrepreneurship is a wonderful thing, but it isn't astonishing, at least not among people for whom this is already their second or third venture. It's also the incentive obtained from the environment, from all Israeli companies, which see a fast exit as a success."
In an interview with "Globes" a year ago, Lichtman said that Israeli high tech did not lack managerial experience to grow companies here, but that that this was simply not on the agenda of entrepreneurs and investors. "People in Israel aren’t challenged in thinking to found a great company," he said. "There are 120,000 people in Israeli high tech, and it's not possible that we lack the people who can grow great companies."
Lichtman now plans to play an active role in changing this culture.
Lichtman said in response today, "Haim Shani and I have known each other for a very long time, and we both have many years in high tech. The future of the industry in Israel is close to our hearts, especially the ability of the industry to create large companies. We're in the very advanced stages of figuring out ways to help create large Israeli high tech companies."
Bethel Finance: Merrill Lynch sees Teva win in Copaxone patent cases
www.bethelfinance.com
Merrill Lynch predicts that Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) will win its patent case to protect Copaxone, its intravenous treatment for multiple sclerosis, and therefore reiterated its "Buy" recommendation raised its target price to $57 from $55.
Merrill Lynch analysts Gregg Gilbert, Haim Israel, and Sumant Kulkarni also predict that generic Copaxone will enter the market in mid-2015, rather than in 2013, which they say was an overly conservative estimate.
US district court rulings on the two patent challenges to Copaxone by Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) and Sandoz Inc. and by Mylan Inc. (NYSE: MYL) and India's Natco Pharma Ltd. could come at any time. Copaxone is protected by seven Orange Book-listed patents (all expire on May 24, 2014), which are part of litigation. The analysts estimate that Copaxone will have $2.6 billion in US sales in 2012.
In separate developments, several generic companies are challenging Teva's Nuvigil for excessive daytime sleepiness, with trials against Mylan and Watson Pharmaceuticals Inc. (NYSE: WPI) scheduled for June. The analysts expect a settlement to allow generics to enter the market on January 1, 2015, instead of in 2018.
Merrill Lynch forecasts Teva's earnings per share of $5.58 on $21.65 billion revenue in 2012 and $6.21 on $22.22 billion revenue in 2013.
UBS also reiterates its "Buy" recommendation for Teva with a target price of $60. It cited yesterday's announcement of positive results in a Phase III clinical trial of QNASL for the treatment of seasonal and perennial allergic rhinitis
Teva's share price fell 0.6% by early afternoon on the TASE today to NIS 171.20, after falling 0.4% on Nasdaq yesterday to $45.06, giving a market cap of $42.5 billion.
Merrill Lynch predicts that Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) will win its patent case to protect Copaxone, its intravenous treatment for multiple sclerosis, and therefore reiterated its "Buy" recommendation raised its target price to $57 from $55.
Merrill Lynch analysts Gregg Gilbert, Haim Israel, and Sumant Kulkarni also predict that generic Copaxone will enter the market in mid-2015, rather than in 2013, which they say was an overly conservative estimate.
US district court rulings on the two patent challenges to Copaxone by Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) and Sandoz Inc. and by Mylan Inc. (NYSE: MYL) and India's Natco Pharma Ltd. could come at any time. Copaxone is protected by seven Orange Book-listed patents (all expire on May 24, 2014), which are part of litigation. The analysts estimate that Copaxone will have $2.6 billion in US sales in 2012.
In separate developments, several generic companies are challenging Teva's Nuvigil for excessive daytime sleepiness, with trials against Mylan and Watson Pharmaceuticals Inc. (NYSE: WPI) scheduled for June. The analysts expect a settlement to allow generics to enter the market on January 1, 2015, instead of in 2018.
Merrill Lynch forecasts Teva's earnings per share of $5.58 on $21.65 billion revenue in 2012 and $6.21 on $22.22 billion revenue in 2013.
UBS also reiterates its "Buy" recommendation for Teva with a target price of $60. It cited yesterday's announcement of positive results in a Phase III clinical trial of QNASL for the treatment of seasonal and perennial allergic rhinitis
Teva's share price fell 0.6% by early afternoon on the TASE today to NIS 171.20, after falling 0.4% on Nasdaq yesterday to $45.06, giving a market cap of $42.5 billion.
Bethel Finance: India blacklists Israel Military Industries for 10 years
www.bethelfinance.com
India has barred Israel Military Industries, as well as five other foreign defense contractors, from bidding for defense contracts in the country for 10 years. IMI was notified yesterday of Monday's decision by the Indian Ministry of Defense and says it will appeal.
The ban followed an investigation by India's Central Bureau of Investigation. The agency, which completed its probe in 2009, concluded that there was sufficient evidence to implicate the blacklisted firms in bribing Sudipta Ghosh, the former director of Ordnance Factories, and other officers to win six contracts.
The companies were given hearings but the ministry found their explanations lacking.
The CBI recommended that action be taken against the companies. The decision is expected to affect not only IMI's activities in India but also those of other Israeli defense firms.
Although the outcome of the investigation had long been known, the Israeli defense establishment greeted the decision with surprise. Defense officials said they thought the hearing process for IMI was still continuing. Earlier yesterday IMI said it hadn't received official notice of the blacklist decision; the notice did however arrive later in the day.
"The Defense Ministry was surprised to hear of the decision by the Indian Ministry of Defense, because the hearing process for IMI against the intent of imposing sanctions on it had not been completed, and especially since IMI had very good claims against the move," the Defense Ministry said in a statement yesterday, adding that it will consult with IMI on a response.
IMI said in a statement that it did and does obey the law and will continue to work with the Indian authorities to resolve the issue. In any case, it said, it plans to appeal on the grounds that the conclusion is based on "erroneous facts" and ignores information submitted by the company.
It is thought that IMI had only begun developing its operations in the Indian market and had signed an agreement to build a factory - the agreement that triggered the investigation. Since the probe began IMI has all but frozen its activities in India; no other deals have been reported.
India is considered a key export market for Israeli defense companies. All the players, including Israel Aerospace Industries, Rafael Advanced Defense Systems and Elbit Systems, bid for Indian tenders. Some Israeli defense manufacturers are building factories in India, mainly to meet the requirements of reciprocal procurement agreements.
Industry sources outside IMI have expressed concern that IMI's presence on the blacklist could affect other Israeli firms, though there have been no signs of any recoil yet.
They also suggested that the Indian decision could hamstring Israeli government efforts to privatize IMI. Since India had been considered one of its biggest customers, the loss could diminish IMI's value.
The other companies placed on the blacklist were Singapore Technologies Kinetics, Rheinmetall Air Defence Zurich, Corporation Defence Russia, T.S. Kisan & Co. and R.K. Machine Tools. The last two are Indian companies.
Bribery allegations abound
In the past, Israel Aerospace Industries had been accused of landing jobs by bribing Indian officials. The company denied the allegations and was not part of the Central Bureau of Investigation's probe.
Nor has there been any mention of adding IAI to the blacklist. After publication of the suspicions, IAI won billions of dollars worth of deals in India.
Earlier this week it turned out that Soltam, a member of the Elbit Systems group of companies, had been blacklisted by the Philippines back in July 2011, for one year.
Soltam is well known in Israeli households for its stainless steel cookware, but in military circles it's better known for making advanced artillery systems, mortars, ammunition and auxiliary equipment. Elbit Systems bought the controlling interest in Soltam in 2010, after Soltam was accused of bribing officials in Kazakhstan. The company denied the allegations.
Soltam's client in the Philippines was the army. The allegation against it isn't corruption, it's failing to deliver two orders before an October 2010 deadline. Elbit Systems did not comment on the move by Manila.
India has barred Israel Military Industries, as well as five other foreign defense contractors, from bidding for defense contracts in the country for 10 years. IMI was notified yesterday of Monday's decision by the Indian Ministry of Defense and says it will appeal.
The ban followed an investigation by India's Central Bureau of Investigation. The agency, which completed its probe in 2009, concluded that there was sufficient evidence to implicate the blacklisted firms in bribing Sudipta Ghosh, the former director of Ordnance Factories, and other officers to win six contracts.
The companies were given hearings but the ministry found their explanations lacking.
The CBI recommended that action be taken against the companies. The decision is expected to affect not only IMI's activities in India but also those of other Israeli defense firms.
Although the outcome of the investigation had long been known, the Israeli defense establishment greeted the decision with surprise. Defense officials said they thought the hearing process for IMI was still continuing. Earlier yesterday IMI said it hadn't received official notice of the blacklist decision; the notice did however arrive later in the day.
"The Defense Ministry was surprised to hear of the decision by the Indian Ministry of Defense, because the hearing process for IMI against the intent of imposing sanctions on it had not been completed, and especially since IMI had very good claims against the move," the Defense Ministry said in a statement yesterday, adding that it will consult with IMI on a response.
IMI said in a statement that it did and does obey the law and will continue to work with the Indian authorities to resolve the issue. In any case, it said, it plans to appeal on the grounds that the conclusion is based on "erroneous facts" and ignores information submitted by the company.
It is thought that IMI had only begun developing its operations in the Indian market and had signed an agreement to build a factory - the agreement that triggered the investigation. Since the probe began IMI has all but frozen its activities in India; no other deals have been reported.
India is considered a key export market for Israeli defense companies. All the players, including Israel Aerospace Industries, Rafael Advanced Defense Systems and Elbit Systems, bid for Indian tenders. Some Israeli defense manufacturers are building factories in India, mainly to meet the requirements of reciprocal procurement agreements.
Industry sources outside IMI have expressed concern that IMI's presence on the blacklist could affect other Israeli firms, though there have been no signs of any recoil yet.
They also suggested that the Indian decision could hamstring Israeli government efforts to privatize IMI. Since India had been considered one of its biggest customers, the loss could diminish IMI's value.
The other companies placed on the blacklist were Singapore Technologies Kinetics, Rheinmetall Air Defence Zurich, Corporation Defence Russia, T.S. Kisan & Co. and R.K. Machine Tools. The last two are Indian companies.
Bribery allegations abound
In the past, Israel Aerospace Industries had been accused of landing jobs by bribing Indian officials. The company denied the allegations and was not part of the Central Bureau of Investigation's probe.
Nor has there been any mention of adding IAI to the blacklist. After publication of the suspicions, IAI won billions of dollars worth of deals in India.
Earlier this week it turned out that Soltam, a member of the Elbit Systems group of companies, had been blacklisted by the Philippines back in July 2011, for one year.
Soltam is well known in Israeli households for its stainless steel cookware, but in military circles it's better known for making advanced artillery systems, mortars, ammunition and auxiliary equipment. Elbit Systems bought the controlling interest in Soltam in 2010, after Soltam was accused of bribing officials in Kazakhstan. The company denied the allegations.
Soltam's client in the Philippines was the army. The allegation against it isn't corruption, it's failing to deliver two orders before an October 2010 deadline. Elbit Systems did not comment on the move by Manila.
Bethel Finance: Israel stunned by India’s ban on defense contracts with Israeli weapons company
www.bethelfinance.com
Israel says it is “surprised” by a decision by India’s defense ministry to ban a leading Israeli weapons manufacturer from bidding on Indian defense contracts for the next decade.
India announced on Tuesday it was blacklisting Israel Military Industries Ltd. and five other firms from India, Switzerland, Russia and Singapore, over allegations of bribing an Indian official to win contracts.
The Indian defense ministry said it made the decision after giving the companies a chance to respond to the allegations.
A statement Wednesday by Israel’s defense ministry says the Israeli weapons company has “very good claims” against the Indian allegations. The ministry says it would consult with the company about how to respond to the Indian ban.
Israel says it is “surprised” by a decision by India’s defense ministry to ban a leading Israeli weapons manufacturer from bidding on Indian defense contracts for the next decade.
India announced on Tuesday it was blacklisting Israel Military Industries Ltd. and five other firms from India, Switzerland, Russia and Singapore, over allegations of bribing an Indian official to win contracts.
The Indian defense ministry said it made the decision after giving the companies a chance to respond to the allegations.
A statement Wednesday by Israel’s defense ministry says the Israeli weapons company has “very good claims” against the Indian allegations. The ministry says it would consult with the company about how to respond to the Indian ban.
Bethel Finance: Israel Discount Bank Conference Call Annual & Q4 2011 Report
www.bethelfinance.com
Israel Discount Bank Limited (TASE: DSCT) announced today that it will be releasing its financial results for Q4 and full year 2011 on Wednesday, 28th March, 2012.
The Bank will be hosting a conference call on Wednesday, 28th March, 2012 at 16.00 (Israel), 15.00 (UK) and 10.00 (EST), during which, management will review the results and be available to answer questions. Participating from Israel Discount Bank are Mr. Reuven Spiegel, CEO, Mr. Yigal Ronay, Head of Finance and Mr. Yossi Beressi, Chief Accountant.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences.
Israel Discount Bank Limited (TASE: DSCT) announced today that it will be releasing its financial results for Q4 and full year 2011 on Wednesday, 28th March, 2012.
The Bank will be hosting a conference call on Wednesday, 28th March, 2012 at 16.00 (Israel), 15.00 (UK) and 10.00 (EST), during which, management will review the results and be available to answer questions. Participating from Israel Discount Bank are Mr. Reuven Spiegel, CEO, Mr. Yigal Ronay, Head of Finance and Mr. Yossi Beressi, Chief Accountant.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences.
Bethel Finance: Journalist arrested in New Delhi bomb attack
www.bethelfinance.com
Police arrested an Indian journalist to investigate possible links to the bombing of an Israeli diplomatic vehicle last month in New Delhi, authorities said Wednesday, the first apparent breakthrough in an attack that Israel blamed on Iran.
The Press Trust of India said the suspect had claimed to work for an Iranian news organization, a report Indian police declined to confirm. His lawyer said he had taken at least one reporting trip to Iran on behalf of India's state broadcaster.
Though Indian authorities have not implicated Iran in the bombing, any leads that point in that direction could complicate India's delicate efforts to ward off growing Western pressure and maintain its strong economic ties with Tehran.
Energy-starved India remains a large market for Iranian oil, and those purchases could blunt the effect of intensified sanctions being imposed by the United States and European Union to force Iran to roll back its nuclear ambitions.
"India finds itself between a rock and a hard place over Iran," said Arundhati Ghose, a retired Indian diplomat. "It's a tough call for the government, but one that New Delhi will have to confront eventually."
Police arrested Syed Mohammed Kazmi on Tuesday after investigations showed he had been in touch with a suspect they believe may have stuck a magnetic bomb on an Israeli diplomat's car, police spokesman Rajan Bhagat said.
Police said they searched Kazmi's house over the past two days to gather evidence that might link him to the Feb. 13 attack, which wounded the diplomat's wife, her driver and two other people in a nearby car. Police did not say what evidence they found.
Kazmi, 50, appeared in court Wednesday where a judge allowed the police to hold him for questioning till March 27.
"My client has been falsely implicated. He is not an international terrorist," Kazmi's lawyer, Vijay Aggarwal, told reporters.
Aggarwal said Kazmi was a journalist who had traveled to Iran while covering the Iraq war for state television and reported on issues relating to Iran. He did not elaborate or clarify when Kazmi had been in Iran.
The court allowed Kazmi to meet with his lawyer every day and ordered a medical examination every two days to rule out the possibility he might be tortured.
The New Delhi blast came the same day a bomb was discovered on an Israeli diplomat's car in the former Soviet republic of Georgia. The next day, three Iranians accidentally blew up their house in Thailand, and Israeli authorities said the similarity between their explosives and the two earlier bombs linked Iran to all three incidents.
Indian officials have refused to assign blame while the investigation continues.
Israel has accused Iran of waging a covert campaign of state terrorism and has threatened military strikes on Iranian nuclear facilities.
If Kazmi's arrest and interrogation leads to evidence of Iran's involvement — either directly or through its proxies — in the New Delhi attack, the fallout could put India in a diplomatic quandary.
Iran is one of India's major suppliers of oil, accounting for 12 percent of its energy needs.
So far, India has fended off criticism for its growing economic ties with Iran by saying it does not heed unilateral sanctions, such as those being imposed by the United States and European Union.
"We have accepted sanctions that are made by the United Nations," Foreign Secretary Ranjan Mathai told reporters in Washington at a recent press briefing. "Other sanctions do not apply to us."
Western sanctions have made it harder for Indian companies to pay for Iranian oil, with international banks unwilling to handle transactions from Tehran without breaching the new American sanctions on Iran's financial earnings from oil.
Last month, India and Iran agreed to an arrangement for 45 percent of the $11 billion in annual oil payments to be made in Indian rupees, with the rest to be paid in a barter system.
Tehran is looking to trade oil for Indian-made machinery, iron and steel, minerals and automobiles, while Indian companies plan to invest in infrastructure projects in Iran including developing oil and gas fields, roads and railways.
India brushed off the international outrage over the blasts and said it would go ahead with a visit to Tehran this weekend by an Indian trade delegation headed by the commerce secretary.
"India needs the Iranian crude. It would be very difficult to find alternative sources of oil that would be acceptable to Indian refineries," said Mr. Cedric Marmet from Bethel Finance Ltd. on condition of anonymity because he was not authorized to speak to the media.
Many of India's aging oil refineries are configured to use Iranian crude oil. Retrofitting these refineries would be costly, the official said.
India is also looking after its strategic interests in Iran's neighbor Afghanistan, which India hopes to prevent from falling under the sway of its archrival, Pakistan, after the 2014 withdrawal of NATO troops.
India uses Iranian ports to send goods to Afghanistan as it scrambles to maintain influence there.
"India is now in a panic over what lies ahead in Afghanistan. The Americans are leaving Afghanistan; they are talking to the Taliban. India will find itself scrambling for access in Afghanistan," says K.C. Singh, a former Indian ambassador to Iran.
To this end, India is helping develop the southern Iranian port of Chabahar and a rail link that will offer it direct access to Afghanistan.
New Delhi has not remained completely immune to sanction pressures and is slowly easing its dependence on Iranian oil.
Trends show a gradual decline in Iranian oil imports, with a temporary spike in January due to the bunching of earlier supplies that were delayed due to payment hurdles.
India has also developed close ties with Israel after diplomatic relations were established in 1992, and Tel Aviv has emerged as an important arms supplier.
Police arrested an Indian journalist to investigate possible links to the bombing of an Israeli diplomatic vehicle last month in New Delhi, authorities said Wednesday, the first apparent breakthrough in an attack that Israel blamed on Iran.
The Press Trust of India said the suspect had claimed to work for an Iranian news organization, a report Indian police declined to confirm. His lawyer said he had taken at least one reporting trip to Iran on behalf of India's state broadcaster.
Though Indian authorities have not implicated Iran in the bombing, any leads that point in that direction could complicate India's delicate efforts to ward off growing Western pressure and maintain its strong economic ties with Tehran.
Energy-starved India remains a large market for Iranian oil, and those purchases could blunt the effect of intensified sanctions being imposed by the United States and European Union to force Iran to roll back its nuclear ambitions.
"India finds itself between a rock and a hard place over Iran," said Arundhati Ghose, a retired Indian diplomat. "It's a tough call for the government, but one that New Delhi will have to confront eventually."
Police arrested Syed Mohammed Kazmi on Tuesday after investigations showed he had been in touch with a suspect they believe may have stuck a magnetic bomb on an Israeli diplomat's car, police spokesman Rajan Bhagat said.
Police said they searched Kazmi's house over the past two days to gather evidence that might link him to the Feb. 13 attack, which wounded the diplomat's wife, her driver and two other people in a nearby car. Police did not say what evidence they found.
Kazmi, 50, appeared in court Wednesday where a judge allowed the police to hold him for questioning till March 27.
"My client has been falsely implicated. He is not an international terrorist," Kazmi's lawyer, Vijay Aggarwal, told reporters.
Aggarwal said Kazmi was a journalist who had traveled to Iran while covering the Iraq war for state television and reported on issues relating to Iran. He did not elaborate or clarify when Kazmi had been in Iran.
The court allowed Kazmi to meet with his lawyer every day and ordered a medical examination every two days to rule out the possibility he might be tortured.
The New Delhi blast came the same day a bomb was discovered on an Israeli diplomat's car in the former Soviet republic of Georgia. The next day, three Iranians accidentally blew up their house in Thailand, and Israeli authorities said the similarity between their explosives and the two earlier bombs linked Iran to all three incidents.
Indian officials have refused to assign blame while the investigation continues.
Israel has accused Iran of waging a covert campaign of state terrorism and has threatened military strikes on Iranian nuclear facilities.
If Kazmi's arrest and interrogation leads to evidence of Iran's involvement — either directly or through its proxies — in the New Delhi attack, the fallout could put India in a diplomatic quandary.
Iran is one of India's major suppliers of oil, accounting for 12 percent of its energy needs.
So far, India has fended off criticism for its growing economic ties with Iran by saying it does not heed unilateral sanctions, such as those being imposed by the United States and European Union.
"We have accepted sanctions that are made by the United Nations," Foreign Secretary Ranjan Mathai told reporters in Washington at a recent press briefing. "Other sanctions do not apply to us."
Western sanctions have made it harder for Indian companies to pay for Iranian oil, with international banks unwilling to handle transactions from Tehran without breaching the new American sanctions on Iran's financial earnings from oil.
Last month, India and Iran agreed to an arrangement for 45 percent of the $11 billion in annual oil payments to be made in Indian rupees, with the rest to be paid in a barter system.
Tehran is looking to trade oil for Indian-made machinery, iron and steel, minerals and automobiles, while Indian companies plan to invest in infrastructure projects in Iran including developing oil and gas fields, roads and railways.
India brushed off the international outrage over the blasts and said it would go ahead with a visit to Tehran this weekend by an Indian trade delegation headed by the commerce secretary.
"India needs the Iranian crude. It would be very difficult to find alternative sources of oil that would be acceptable to Indian refineries," said Mr. Cedric Marmet from Bethel Finance Ltd. on condition of anonymity because he was not authorized to speak to the media.
Many of India's aging oil refineries are configured to use Iranian crude oil. Retrofitting these refineries would be costly, the official said.
India is also looking after its strategic interests in Iran's neighbor Afghanistan, which India hopes to prevent from falling under the sway of its archrival, Pakistan, after the 2014 withdrawal of NATO troops.
India uses Iranian ports to send goods to Afghanistan as it scrambles to maintain influence there.
"India is now in a panic over what lies ahead in Afghanistan. The Americans are leaving Afghanistan; they are talking to the Taliban. India will find itself scrambling for access in Afghanistan," says K.C. Singh, a former Indian ambassador to Iran.
To this end, India is helping develop the southern Iranian port of Chabahar and a rail link that will offer it direct access to Afghanistan.
New Delhi has not remained completely immune to sanction pressures and is slowly easing its dependence on Iranian oil.
Trends show a gradual decline in Iranian oil imports, with a temporary spike in January due to the bunching of earlier supplies that were delayed due to payment hurdles.
India has also developed close ties with Israel after diplomatic relations were established in 1992, and Tel Aviv has emerged as an important arms supplier.
Bethel Finance: Netanyahu Sees Red Sea-Negev Rail Spurring China Trade: Freight
www.bethelfinance.com
Israel is planning a train link between its Red Sea and Mediterranean ports intended to serve as an overland alternative to the Suez Canal and to spur increased trade from China, India and other Asian countries.
The cabinet approved on Feb. 5 a 350-kilometer (218-mile) line to link the city of Eilat, Israel’s sole Asian-waters port, to the existing rail system, connecting to the Ashdod port. The project may start as early as this year.
To Prime Minister Benjamin Netanyahu, the link is a means to increase trade with the expanding economies of Asia, reducing dependence on Israel’s traditional export markets in Europe and the U.S. and transforming Israel into a Middle East trading hub. The premier says having an overland cargo route to the Mediterranean will boost the country’s value as a strategic partner to China and India and would be “useful” in case “problems” arose with the Suez Canal.
“How can we get the great Asian economies interested?” Netanyahu asked during an interview with Bloomberg News in Tel Aviv on Feb. 20. “We can build a train line from the Red Sea to Ashdod to link Asia and Europe.” The project “will help open up markets.”
Israeli officials in recent discussions with Chinese and Indian counterparts have raised the possibility of companies from there taking part in building and operating the estimated 8.6 billion shekel ($2.3 billion) project, expected by the government to take five years once construction gets under way.
Chemical Exports
The government estimates the rail link will multiply cargo traffic at the Eilat port, which primarily handles chemical exports to, and merchandise imports from, Asian markets. According to a Ministry of Transport study, chemical exports from Eilat that totaled 2.4 million tons in 2008 may rise to as much as 5.4 million tons in 2020. Shipping containers could increase from 2,000 20-foot containers, or TEU, to 210,000 TEU.
The government is selling the port to private owners and expects to complete the process this year. Five companies -- Maman Cargo Terminals and Handling Ltd., Gadot Chemicals Tankers and Terminals Ltd. (GDTN), Papo Maritime Ltd., Mifalei Tovala Ltd. and Gold Bond Group Ltd. (GOLD) -- have reached an advanced stage in the sale, the Finance Ministry announced on Feb. 21. In two months, after the government works out provisions to safeguard the interests of port workers, the contenders can submit bids.
Mifalei Tovala is a subsidiary of publicly traded Israel Chemicals Ltd. (ICL), which extracts minerals from the Dead Sea to make potash and fertilizers. Acquiring the port may help it contain labor actions and other contingencies that have sometimes delayed its exports to Asia, said Joseph Wolf, an equity analyst at Barclays Capital in Tel Aviv.
Sustaining Edge
“One of Israel Chemicals’ biggest advantages over their rivals is their time-to-market shipping to India and China,” Wolf said in a phone interview. “Controlling transportation and making sure that edge is sustained is an important part of their strategy.”
Israel Chemicals shares are down 0.8 percent this year in Tel Aviv; Potash Corporation of Saskatchewan Inc., the world’s largest fertilizer producer by market value, is up 5.8 percent in New York trading over the same period.
Linking Eilat by rail to Ashdod, along a route used in ancient times by caravans bringing spices and incense from Arabia and India to Europe, has been contemplated for decades. It was first promoted by Netanyahu while he was finance minister in 2003. He revived the idea after becoming prime minister in 2009 as part of a nationwide rail development program.
Israel is planning a train link between its Red Sea and Mediterranean ports intended to serve as an overland alternative to the Suez Canal and to spur increased trade from China, India and other Asian countries.
The cabinet approved on Feb. 5 a 350-kilometer (218-mile) line to link the city of Eilat, Israel’s sole Asian-waters port, to the existing rail system, connecting to the Ashdod port. The project may start as early as this year.
To Prime Minister Benjamin Netanyahu, the link is a means to increase trade with the expanding economies of Asia, reducing dependence on Israel’s traditional export markets in Europe and the U.S. and transforming Israel into a Middle East trading hub. The premier says having an overland cargo route to the Mediterranean will boost the country’s value as a strategic partner to China and India and would be “useful” in case “problems” arose with the Suez Canal.
“How can we get the great Asian economies interested?” Netanyahu asked during an interview with Bloomberg News in Tel Aviv on Feb. 20. “We can build a train line from the Red Sea to Ashdod to link Asia and Europe.” The project “will help open up markets.”
Israeli officials in recent discussions with Chinese and Indian counterparts have raised the possibility of companies from there taking part in building and operating the estimated 8.6 billion shekel ($2.3 billion) project, expected by the government to take five years once construction gets under way.
Chemical Exports
The government estimates the rail link will multiply cargo traffic at the Eilat port, which primarily handles chemical exports to, and merchandise imports from, Asian markets. According to a Ministry of Transport study, chemical exports from Eilat that totaled 2.4 million tons in 2008 may rise to as much as 5.4 million tons in 2020. Shipping containers could increase from 2,000 20-foot containers, or TEU, to 210,000 TEU.
The government is selling the port to private owners and expects to complete the process this year. Five companies -- Maman Cargo Terminals and Handling Ltd., Gadot Chemicals Tankers and Terminals Ltd. (GDTN), Papo Maritime Ltd., Mifalei Tovala Ltd. and Gold Bond Group Ltd. (GOLD) -- have reached an advanced stage in the sale, the Finance Ministry announced on Feb. 21. In two months, after the government works out provisions to safeguard the interests of port workers, the contenders can submit bids.
Mifalei Tovala is a subsidiary of publicly traded Israel Chemicals Ltd. (ICL), which extracts minerals from the Dead Sea to make potash and fertilizers. Acquiring the port may help it contain labor actions and other contingencies that have sometimes delayed its exports to Asia, said Joseph Wolf, an equity analyst at Barclays Capital in Tel Aviv.
Sustaining Edge
“One of Israel Chemicals’ biggest advantages over their rivals is their time-to-market shipping to India and China,” Wolf said in a phone interview. “Controlling transportation and making sure that edge is sustained is an important part of their strategy.”
Israel Chemicals shares are down 0.8 percent this year in Tel Aviv; Potash Corporation of Saskatchewan Inc., the world’s largest fertilizer producer by market value, is up 5.8 percent in New York trading over the same period.
Linking Eilat by rail to Ashdod, along a route used in ancient times by caravans bringing spices and incense from Arabia and India to Europe, has been contemplated for decades. It was first promoted by Netanyahu while he was finance minister in 2003. He revived the idea after becoming prime minister in 2009 as part of a nationwide rail development program.
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