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Business in brief: Israel’s Together to sell cosmetics based on cannabis

Business in brief: Israel’s Together to sell cosmetics based on cannabis

Delek Israel planning to install compressed natural gas pumps in 12 filling stations

Delek Israel has proposed installing compressed natural gas pumps in 12 filling stations across Israel at a cost of 36 million shekels ($9.9 million). Delek, a subsidiary of the Delek Group, was responding to a call by the Energy Ministry to receive bids to install such pumps with government assistance. The ministry is allocating 100 million shekels to install the pumps for heavy vehicles deemed major polluters. The CNG, considered less polluting than other fuels, would serve mainly big trucks. Delek Israel announced on Monday its entry into the CNG market for energy consumers, for which it has built a $50-million facility for compressing natural gas in Pi Glilot Ashdod. It recently began supplying CNG to Strauss Dairy. Esther Eldan, Delek Israel’s CEO, said the decision to invest in a compression facility is part of the company’s business strategy to expand activity among energy consumers in industry and gas stations. (Ora Coren)

Leader: More declines in the bond market will hurt bank profits

Bond prices have declined in recent weeks, causing an increase in yields of government bonds. The decline stemmed from a so-far unfounded expectation of the Bank of Israel to raise interest rates, a rise in inflationary expectations, and a similar rise in global short-term interest rates and long-term bond yields. “Banks have large Nostro accounts. A rise in yields is better for them long-term but can cause short-term losses,” said Alon Glazer of Leader Capital Markets about the banks’ prospects. Leumi, Hapoalim and Discount all have large Nostro accounts, which are accounts banks hold in foreign currency in other banks. Leumi has the largest one at 80 billion shekels ($22 billion), an exposure worth more than triple its equity. “Nearly 75% of Nostro portfolios are invested in government bonds,” said Glazer, meaning fluctuations in bond prices can have an immediate impact on a banks’ profits. (Michael Rochvarger)

Israel’s Together to sell cosmetics based on cannabis, Dead Sea minerals

Israel’s Together Pharma said on Tuesday it will set up a new company with Premier Dead Sea to sell cosmetics based on cannabis and Dead Sea minerals. The firm said the products would be based on CBD, or Cannabidiol. “CBD has a variety of properties that are beneficial to various diseases because of it anti-inflammatory, anti-bacterial, anti-oxidant and anti-aging properties, and its market is expected to grow 700 percent by the year 2020,” it said. The joint company will be set up in Europe, with Together holding 51% and Premier 49%. Investors have piled into cannabis stocks as many countries consider legalizing marijuana at least for medicinal purposes. Shares of Together, which has a market value of nearly 400 million shekels ($110 million), were down 6.8 percent on Tuesday in Tel Aviv but have soared nearly 450 percent so far in 2018. (Reuters)

IDB Properties weighs major bond issue

Real estate company IDB Properties is weighing a bond issuance worth 500 million euros. The bonds are expected to be issued for a fixed rate and without guarantees for a period of eight years, and will be traded on the Luxembourg exchange. IDB Properties, in which IDB Group has a controlling stake of 38%, will pitch the plan to investors on Thursday. IDB Properties specializes in investment real estate in Berlin. Its 20,864 housing units in the capital yielded 31 million euros in revenue in the first quarter of 2018. The company’s market cap has grown 12% in 2018. (Yoram Gabison)

Stocks rise, buoyed by Wall Street

Tel Aviv’s stock indexes closed up on Tuesday, gaining a tailwind from gains on Wall Street. The TA-35 ended 0.6% higher at 1544.26 points, while the broader TA-126 made a similar gain to 1380.66. The Banks-5 index gained 0.5% to finish the day at 2096.90. One of the big winners was OPKO Health, a diagnostics and pharmaceutical company, which shot up 6.3% to 20.36 shekels. Its share price is up 20% over the past week, having drawn attention with its activity regarding prostate cancer treatments. Another stock that stood out was Oil Refineries, which jumped 3.0% to 1.59 on news of it acquiring options in The Israel Corporation, which in turn fell 1.26% to 765 shekels. Long-term government bonds garnered attention, rising up to 1.7% for index-linked bonds and 1.0% for shekel-denominated bonds. In the forex markets, the dollar gained 0.7% to a value of 3.642 shekels. (Noam Bar)

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