Business in Brief: Two Israelis Charged With Insider Trading in Mobileye Shares

After four years IDB allowed to drop ‘going concern’ warning on financial reports; Bank of Israel study finds link between shekel depreciation and export growth.

The Mobileye logo appearing on a screen at the post where it trades on the floor of the New York Stock Exchange, Monday, March 13, 2017.
The Mobileye logo appearing on a screen of the New York Stock Exchange on Monday. The Intel deal may be the harbinger of more Israeli auto tech companies' success. Richard Drew/AP

Two Israelis charged with insider trading in Mobileye shares

Two Israelis were charged by the U.S. Securities and Exchange Commission with insider trading in Mobileye before Intel said it was buying the maker of driverless-car technology for $15.3 billion. In a complaint filed on Thursday, the SEC alleged that Ariel Darvasi and Amir Waldman made “remarkably timed” purchases of Mobileye shares and call options prior to the March 13 announcement. The SEC said Darvasi earned about $427,000 from the trades while Waldman profited by$4.5 million after the announcement caused shares of Jerusalem-based Mobileye to soar 28.2 % in a single day. According to the SEC, both defendants were connected to Mobileye insiders through the academic community at the Hebrew University of Jerusalem, where much of Mobileye’s core technology was developed and at least 11 Mobileye directors and officers were affiliated. Darvasi, of Mevasseret Zion, is a genetics professor at the university, while Waldman, of Yarqona, is a self-employed engineer, the SEC said. (Reuters)

After four years IDB allowed to drop ‘going concern’ warning on financial reports

IDB Development Corporation, the holding company controlled by Argentina’s Eduardo Elsztein, published its results without a “going concern” warning for the first time in four years. The conglomerate reported a 262 million shekel ($72 million) profit in fourth-quarter 2016, turning around from a 360 million loss a year ago, thanks to the sale of its stake in agrochemicals maker Adama and improved results at its Cellcom Israel, Super-Sol and Property & Building Limited units. Elsztein told a meeting of investors Thursday he was in no rush to sell of the group’s array of businesses because low interest rates made financing so inexpensive. “Everywhere I go people are still asking me, ‘Are you selling Cellcom, Super-Sol, Property & Building or any other assets?’ But I see things differently and in my eyes it’s better to hold on to these assets and not sell them.” However, IDB has retained JPMorgan to find a single buyer for its 55% stake. (Michael Rochvarger)

Bank of Israel study finds link between shekel depreciation and export growth

Just days after it stepped into the foreign currency market is a big way to stem the dollar’s loss against the shekel, the Bank of Israel said it would be issuing a study showing intervention works to boost exports. The study found that each 1% depreciation in the value of the shekel led to a rise of between 0.3% and 0.6% in exports after a time lag of two years. It said the lag was probably due to companies’ contractual commitments and currency hedging measures they typically make. The biggest beneficiary is industry, which gets an 0.8% boost, while for services, including tourism, the effect is more modest. The study, which will appear in the Bank of Israel’s annual report to be released Wednesday, said the loss of export markets by Israeli companies from a strong shekel would be hard to win back when the currency weakened because of the costs involved from a company trying to reestablish itself after a hiatus. (Moti Bassok) 

Banks, insurers push Tel Aviv shares lower

Tel Aviv shares ended lower on Sunday, pulled down by financial shares. The blue chip TA-35 index ended down more than 1% to 1,401.54, while the TA-125 lost nearly 0.8% to 1,256.50, on turnover of 665 million shekels ($$183 million). Phoenix led insurers lower, falling 3.45% to 14.54 shekels. Migdal was down 2.4% at 3.63, and Clal Insurance lost 1.8% to 58.91. Among banks, Israel Discount fell 1.6% to 7.97 and Mizrahi Tefahot 1.1% to 62.37. Elbit Systems dropped 1.9% to 408.50. Leading the day’s gainers, Mazor Robotics jumped 12.8% to 50.58, catching up on its Wall Street price, even though the company issued no announcement to explain the jump. Israel Electric Corporation raised 1.6 billion shekels over the weekend in the institutional tranche, 600 million more than it had slated amid strong demands. Avgol raised 197 million in bonds from institutions. Delek Group moved closer to buying Ithaca Energy over the weekend. (Shelly Appelberg)

Israelis charged with Mobileye insider trading

Two Israelis were charged by the U.S. Securities and Exchange Commission with insider trading in Mobileye before Intel said it was buying the maker of driverless-car technology for $15.3 billion. In a complaint filed on Thursday, the SEC alleged that Ariel Darvasi and Amir Waldman made “remarkably timed” purchases of Mobileye shares and call options prior to the March 13 announcement. The SEC said Darvasi earned about $427,000 from the trades while Waldman profited by$4.5 million after the announcement caused shares of Jerusalem-based Mobileye to soar 28.2 % in a single day. According to the SEC, both defendants were connected to Mobileye insiders through the academic community at the Hebrew University of Jerusalem, where much of Mobileye’s core technology was developed and at least 11 Mobileye directors and officers were affiliated. Darvasi, of Mevasseret Zion, is a genetics professor at the university, while Waldman, of Yarqona, is a self-employed engineer, the SEC said. (Reuters)

IDB allowed to drop ‘going concern’ warnings on financial reports after four years

IDB Development Corporation, the holding company controlled by Argentina’s Eduardo Elsztein, published its results without a “going concern” warning for the first time in four years. The conglomerate reported a 262 million shekel ($72 million) profit in fourth-quarter 2016, turning around from a 360 million loss a year ago, thanks to the sale of its stake in agrochemicals maker Adama and improved results at its Cellcom Israel, Super-Sol and Property & Building Limited units. Elsztein told a meeting of investors Thursday he was in no rush to sell of the group’s array of businesses because low interest rates made financing so inexpensive. “Everywhere I go people are still asking me, ‘Are you selling Cellcom, Super-Sol, Property & Building or any other assets?’ But I see things differently and in my eyes it’s better to hold on to these assets and not sell them.” However, IDB has retained JPMorgan to find a single buyer for its 55% stake. (Michael Rochvarger)

Bank of Israel study finds link between shekel depreciation and export growth

Just days after it stepped into the foreign currency market is a big way to stem the dollar’s loss against the shekel, the Bank of Israel said it would be issuing a study showing intervention works to boost exports. The study found that each 1% depreciation in the value of the shekel led to a rise of between 0.3% and 0.6% in exports after a time lag of two years. It said the lag was probably due to companies’ contractual commitments and currency hedging measures they typically make. The biggest beneficiary is industry, which gets an 0.8% boost, while for services, including tourism, the effect is more modest. The study, which will appear in the Bank of Israel’s annual report to be released Wednesday, said the loss of export markets by Israeli companies from a strong shekel would be hard to win back when the currency weakened because of the costs involved from a company trying to reestablish itself after a hiatus. (Moti Bassok) 

Banks, insurers push Tel Aviv shares lower

Tel Aviv shares ended lower on Sunday, pulled down by financial shares. The blue chip TA-35 index ended down more than 1% to 1,401.54, while the TA-125 lost nearly 0.8% to 1,256.50, on turnover of 665 million shekels ($$183 million). Phoenix led insurers lower, falling 3.45% to 14.54 shekels. Migdal was down 2.4% at 3.63, and Clal Insurance lost 1.8% to 58.91. Among banks, Israel Discount fell 1.6% to 7.97 and Mizrahi Tefahot 1.1% to 62.37. Elbit Systems dropped 1.9% to 408.50. Leading the day’s gainers, Mazor Robotics jumped 12.8% to 50.58, catching up on its Wall Street price, even though the company issued no announcement to explain the jump. Israel Electric Corporation raised 1.6 billion shekels over the weekend in the institutional tranche, 600 million more than it had slated amid strong demands. Avgol raised 197 million in bonds from institutions. Delek Group moved closer to buying Ithaca Energy over the weekend. (Shelly Appelberg)