Clal Finance analyst Yuval Ben-Zeev today cut his recommendation for Africa-Israel Investments Ltd. (TASE:AFIL) to "Market perform", after the company's CFO, Ron Fainaro, announced his resignation this morning.
Ben-Zeev says that Fainaro played a critical role working with CEO Izzy Cohen during the negotiations for Africa-Israel's debt settlement and rebuilding of investor confidence. He notes two key points: Africa-Israel is again a legitimate investment for institutional investors, and the company has the potential of creating value on its US investments.
Ben-Zeev says that Africa-Israel's announcement of Fainaro's resignation was negative for the company because of these two points. Firstly, alongside Cohen, Fainaro was an important factor in obtaining the confidence of institutional investors, and his resignation could be perceived as a warning. Secondly, in the wake of the resignation of AFI USA Inc. CEO Richard Marin last week, investors will find it difficult to see the realization of the potential in the US market, alongside progress in the Russian market.
Africa-Israel's share price fell 4.1% by mid-afternoon to NIS 23.01, giving a market cap of NIS 2.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 19, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010