Despite a 69% drop in Africa-Israel Investments' (TASE: AFIL) share price since last year's peak, Israel Discount Bank still believes the stock is too dear.
Today, Africa-Israel made a NIS 970 million share offering, and from an internal document that has reached "Globes", it emerges that Discount Bank recommends against participation in the issue. The bank recommends selling Africa-Israel stock because of the company's high level of risk, and has set a target price of NIS 88 for the stock, 58% below market.
In the light of the generally positive momentum enjoyed by Africa-Israel, Discount Bank's recommendation is unusual. In addition, analysts usually publish positive recommendations, and if they think a stock is overpriced will publish a neutral recommendation such as "Market perform." Outright "Sell" recommendations are rare.
Discount Bank said in response: "This is an internal analysis not meant for distribution."
Published by Globes [online], Israel business news - www.globes.co.il - on June 25, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008