BNY Mellon Sees ADR Listings Exceeding 2011: Israel Overnight
More Israeli companies will list stock in the U.S. this year than in 2011 as the European debt crisis spurs them to seek out new investors in other markets, according to Bank of New York Mellon Corp.
Three Israeli firms issued American depositary receipts last year, including BioLineRx Ltd. (BLRX), the biopharmaceutical company that surged 69 percent in New York on Jan. 24 after agreeing to develop and sell a hepatitis C treatment with Marseille, France-based Genoscience. Hadasit Bio Holdings Ltd. (HDSY) and Natural Resource Holdings Ltd. (NRHYY) also issued ADRs. BioLineRx shares slumped 7.4 percent to 1.506 shekels at the 4:30 p.m. close in Tel Aviv today, after gaining 40 percent last week.
“As people evaluate what is happening with Europe, Israeli companies are going to look more closely at ways to get access to capital and liquidity and come to the U.S.,” Itai Miller, a vice president at BNY Mellon Depositary Receipts, said by phone in New York on Jan. 27. “We expect to see more than last year.”
Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York has climbed 8.9 percent this year, beating the Nasdaq Composite Index’s (CCMP) 8.1 percent advance and the Standard & Poor’s 500 Index’s 4.7 percent increase.
The Bloomberg Israel-US gauge fell 0.5 percent on Jan. 27 and 1.1 percent last week to 91.37, led by Partner Communications Co. (PTNR), Israel’s second-largest mobile phone company. The Tel Aviv benchmark TA-25 Index (TA-25) lost 0.8 percent to 1,120.80 today after declining 0.6 percent last week.
The BioLineRx ADR surge on Jan. 24 pushed their premium over Tel Aviv-traded shares to 28 percent, the most on record. Trading volumes surged, with more than 6 million changing hands, compared with an average of 7,000 trades a day, according to Bank of New York Mellon Corp.
The biopharmaceutical company, whose largest shareholder is Petach Tikva, Israel-based Teva Pharmaceutical Industries Ltd. (BLRX), listed the shares on July 25.
“Without the U.S. access and the additional hours of trading on Nasdaq, it wouldn’t have been such a success,” Miller said. “Having U.S. investors means that news could be valued more than in the home market. There’s a different level of activity along with niche traders.”
The Tel Aviv Biomed Index (TA-BIOMD) has advanced 7 percent this year, outperforming the TA-25 Index’s 3.2 percent increase. BioLineRx and Prolor Biotech Inc. (PBTH), the Israeli developer of proteins, led gains in the measure.
Rosh Ha’Ayin, Israel-based Partner slumped 4 percent to 29.38 shekels, or the equivalent of $7.84, today. The U.S.- traded shares sank 16 percent to $7.61 last week.
The mobile-phone provider was the worst performer last week both in Tel Aviv and New York after Citigroup Inc. recommended investors sell shares of the company.
“The Israeli mobile market has changed,” Michael Klahr, an analyst at Citigroup in Tel Aviv, wrote in a report e-mailed on Jan. 25. “The earnings and free cash flow outlook for Israeli mobile and telecoms is more uncertain than ever.”
Klahr lowered his rating on Partner to “sell” from “buy” and reiterated his “sell” recommendation on Cellcom Israel Ltd. (CEL), the country’s largest mobile-phone company.
Teva, the world’s largest maker of generic drugs, dropped 2 percent last week to $44.91, while the company’s Tel Aviv shares climbed 0.4 percent to 172.70 shekels, or the equivalent of $46. The shares dropped 2.7 percent to 168 shekels, or $44.84, today.
The U.S. Food & Drugs Administration said Teva’s Cephalon unit had recalled one batch of its Treanda cancer drug after discovering glass fragments in a single vial.
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