July 1 (Bloomberg) -- Israel Chemicals Ltd. sunk to a 19-month low on bets falling corn prices and a government review of natural-resources royalties will lead to lower profits at the fertilizer maker.
The shares fell 1.8 percent to 35.35 shekels, the lowest since December 2011, at the close in Tel Aviv. Controlling holder Israel Corp. dropped 1.4 percent to 2,202 shekels. The benchmark TA-25 Index gained 0.4 percent.
Corn prices for December delivery declined for an eighth day, set for the lowest level since December 2010, after the U.S. government forecast on June 28 that farmers will produce a record harvest this year. A bumper crop could lead to lower demand for fertilizers, Gilad Alper, a senior analyst at Tel Aviv-based Excellence Nessuah Brokerage Ltd., said.
“Lower corn prices are the trigger for the drops today,” Alper said by phone today. “There is an overall negative investor sentiment over these shares because of the uncertain regulatory environment.”
Israel Chemicals shares have declined 12 percent since the Israeli government said in June that a panel led by Eytan Sheshinski will review tax and royalties policies on natural resources. A similar Sheshinski-led committee’s recommendations three years ago were the foundation for a government decision to more than double its share of gas and oil profits.
New taxation would mean revising an agreement the government signed last year with ICL that doubled royalties on potash sales to 10 percent from 5 percent.
Earlier this year Potash Corp. of Saskatchewan Inc. scrapped a proposed takeover of ICL after Finance Minister Yair Lapid said he’d “adamantly oppose” a sale, which would require government approval.
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