Bezeq Gains as Psagot Lifts Rating on Reform Lag: Tel Aviv MoverShoshanna Solomon
Bezeq Israeli Telecommunication Corp. advanced the most in almost two months 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 4 percent, the most since Sept. 9, to 6.50 shekels at the close 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 0.5 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., which has a stake in Bezeq via its B Communications Ltd. unit, increased 3.5 percent. The shares have gained 247 percent this year. B Communications, owner of a 31 percent stake in Bezeq, added 5.4 percent, bringing the gain this year to 377 percent.