Bezeq Rises Most in Week on Bets Drop Overdone
(Corrects estimated earnings ratio in second paragraph.)
Bezeq Israeli Telecommunication Corp. (BEZQ) rose the most in almost a week on investor speculation the country’s largest fixed-line operator is cheap relative to peers after last month’s drop.
Tel Aviv-based Bezeq climbed 1.9 percent, the most in since May 31, to 4.86 shekels at the close in Tel Aviv. Bezeq shares trade at 6.4 times estimated earnings, after tumbling 22 percent in May. That compares with an average 12.1 times for the MSCI World Telecom Services Index (MXWO0TC) and 10.4 times the TA-25 index. The Tel Aviv benchmark advanced 1.3 percent today.
“Even with all the changes in the communications sector, we are talking about a strong and stable company,” said Gil Dattner, an analyst at Tel Aviv-based Bank Leumi Le-Israel (LUMI) Ltd. “The bad news is priced in.”
Prime Minister Benjamin Netanyahu’s government is forcing telecommunication providers to cut fees and is encouraging new players to the market. Israel’s Communications Ministry in May published details of fixed-line market reform that will force Bezeq and Hot Telecommunication System Ltd. (HOT) to sell space on their networks to newcomers. Hot and Golan Telecom Ltd. moved into Israel’s mobile-phone space on May 14. Bezeq operates in the wireless industry through a unit.
Internet Gold-Golden Lines Ltd. (IGLD), which owns a stake in Bezeq via its B Communications Ltd. (BCOM) unit, jumped 9.2 percent to 13.55 shekels and B Communications, owner of a 31 percent interest in Bezeq, surged 4.4 percent.
Hot, Israel’s second-largest fixed-line operator which also provides mobile-phone services, advanced 2.2 percent to 36.99 shekels. The shares were trading 9.9 times estimated earnings.
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