Bezeq Gains as Psagot Lifts Rating on Reform Lag: Tel Aviv Mover
Bezeq Israeli Telecommunication Corp. (BEZQ) advanced to the highest in two weeks after Psagot Securities Ltd. raised its rating on the country’s biggest fixed-line provider to hold from sell citing delays of market reforms.
The shares of the provider which also offers wireless services, increased 2.9 percent to 6.43 shekels, the highest since since Oct. 23 at 2:54 p.m. in Tel Aviv. The benchmark TA-25 Index’s best performer this year fell 7.2 percent on Oct. 23, when Citigroup Inc. said investors should sell shares ahead of the introduction of fixed-line competition. The benchmark gauge gained 0.7 percent.
“The uncertain regulatory timeline plays in Bezeq’s favor,” Ilanit Sherf, an analyst at Tel Aviv-based Psagot said today in an e-mailed note. “Competition being introduced into the fixed-line should not be expected before the second half of 2014 and perhaps even later.”
The fixed-line market is becoming more crowded as state-owned Israel Electric Corp. sets up a fiber network and the Ministry of Communications seeks to introduce a wholesale market for network usage by competitors. The change of guard at the ministry since January 2013 and the exit of senior management have resulted in a delay in reforms, Sherf wrote.
Bezeq is expected to report third-quarter income of 526 million shekels ($149 million) tomorrow, up 54 percent from a year earlier, Sherf estimates.
Internet Gold-Golden Lines Ltd. (IGLD), which has a stake in Bezeq via its B Communications (BRCD) Ltd. unit, increased 6.9 percent. The shares have gained 257 percent this year. B Communications, owner of a 31 percent stake in Bezeq, added 5.5 percent, bringing the gain this year to 377 percent.
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