Business
The sale of the Israel Corporation to Potash could hit trouble in the shape of the Government Companies Authority. Among other holdings, the Israel Corporation owns 52.07% of Israel Chemicals (ICL) (via which it controls potash producer Dead Sea Works, the real prize for Canadian company Potash). The State holds a golden share in ICL, and Government Companies Authority acting director-general Doron Cohen has told Potash it must apply for permission to acquire control in the company. A legal battle could ensue. (See also commentary in today’s edition Can State’s Golden Share Really Stop Potash?)
Potash reportedly values the Israel Corporation at $600 million. It is expected to sell off all holdings apart from ICL. Erwin Eisenberg hopes the sale will help mend the rift in his family.
Other fallout from the report of the impending deal: institutional investors are up in arms over proceedings at last weeks ICL shareholders meeting when Potash, which bought 9% of the company in the State’s recent offer for sale, voted with the controlling shareholder to revoke minority shareholders’ rights to appoint directors. ICL shares fell following the meeting. Potash’s motives are now clear, but the institutions were left in ignorance. An Israel Corporation representative interviewed by "Globes" proved most evasive.
Minister of Communications Limor Livnat told the Knesset Finance Committee that the abolition of Bezeq’s inland telephone calls monopoly should not be delayed. "Globes" commented that Bezeq’s employees may have shot themselves in the foot with last Thursday’s protest action against competition, when they disconnected thousands of lines.
Agis and the General Health Fund exchanged fire over drug prices. IAI and BVR continued to slug it out in court over BVR’s replacement of IAI as sub-contractor in a contract with the German military - IAI says BVR lied in saying it delivered components late. Isracard is forcing traders to sign undertakings not to transact via the Internet.
Elsewhere, cooperation reigned. It was announced that a joint Israeli-Jordanian-Palestinian high tech company was being set up with funding from the Peres Peace Center.
Economy
Tax collection in 1998 was NIS 7.4 billion in arrears. In real terms, tax collected last year was only 1.5% higher than in 1997, as against a budgeted increase of 3%.
The money supply fell 1.5% in December, making a 3.6% fall in two months after a rise of 11.5% in the period June-October. Overall, the money supply rose 12.2% last year. No interest rate reduction is expected at the end of this month unless the December rise in the Consumer Price Index is lower than the 0.5% current forecast.
Capital Market
The Tel Aviv Stock Exchange resumed its advance after last Thursday’s profit taking. The Tel Aviv 100 index rose 1.06% to 311.14 points; the Ma’of index posted a 1.09% rise to 320.58 points. Turnover totaled NIS 216 million. Activity was naturally liveliest in Israel Corporation group shares, which posted significant rises.
The volume of foreign currency trading is reported to be sharply up in January in comparison with December.
Politics
Prime Minister Benjamin Netanyahu told "Newsweek" magazine that he would be re-elected, saying he always lost in opinion polls but won elections. Netanyahu said the Wye agreement had not been suspended for the election period, and that further implementation depended on Palestinian compliance.
Chief of Staff Shaul Mofaz said Israel’s security zone in Lebanon was intended to prevent terrorist infiltration, not rocket fire on Northern settlements. He also said the Hizbollah would keep up its campaign against Israel even if the IDF withdrew to the international border.
Holocaust Deposits Affair
The committee headed by former US Secretary of State Lawrence Eagleburger examining the
question of Holocaust victims’ insurance policies has reached agreement with Generali and other insurance companies that they will publish the names of policy holders from the Holocaust period.
Published by Israel's Business Arena on January 11, 1999