Partner to Cellcom Surge Amid Outlook: Israel Overnight
Partner Communications Co. (PTNR) and Cellcom Israel Ltd. (CEL), Israel’s two largest mobile-phone providers, rallied in New York on prospects easing competition in the sector will help stem declining revenue and earnings.
American depositary receipts of Partner jumped 4.3 percent to the highest since February 2012, narrowing its discount to the shares in Tel Aviv. The Bloomberg Israel-US Equity Index of the most-traded Israeli stocks in New York slipped 0.4 percent as Gazit-Globe Ltd. (GZT) dropped the most in two months. Prolor Biotech Inc. (PBTH) rose to a three-year high before Opko Health Inc. (OPK) begins trading on the Tel Aviv Stock Exchange tomorrow as it completes the acquisition of the Israeli drugmaker.
Cellcom’s average revenue per user increased for the first time in three years, the company said in a statement yesterday. Partner, which is scheduled to report earnings on Aug. 28, rallied to the highest valuation level since May 2011 to trade at 8.4 times estimated earnings, according to data compiled by Bloomberg. Both companies have grappled with increasing competition from Israeli discount operators Hot Telecommunication System Ltd. and Golan Telecom Ltd.
“We see some bottoming out in the mobile sector,” Roni Biron, an analyst at UBS AG in Tel Aviv, said by phone. “People at least have a bit comfort. People are looking for business metrics at Partner to stabilize in its earnings report from mobile companies that have reported.”
The Bloomberg Israel-US measure declined for a third day, closing at 96.91. The TA-25 Index (TA-25) declined 0.2 percent at 10:02 a.m. in Tel Aviv as Cellcom dropped 1.4 percent and Partner slid 1 percent.
Cellcom, the nation’s largest mobile operator, and No. 2 Partner lost market share and reduced prices over the past year after Hot Telecommunication and Golan entered the market in May 2012 and began offering unlimited monthly wireless packages for less than 50 shekels ($13.93).
Partner’s second-quarter sales may increase 42 percent from a year earlier to $566.2 million, according to the average estimate of two analysts surveyed by Bloomberg. That would be the first increase since the third quarter of 2011.
Cellcom climbed 3.7 percent to a 15-month high of $11.54 in New York. Partner’s ADRs rose 4.3 percent to $8.06.
Mellanox Technologies Ltd. (MLNX), an Israeli maker of equipment that speeds electronic data transfers, dropped 2.9 percent to $41.01 in New York, slumping the most in a week. Janney Montgomery Scott LLC analyst William Choi cut his 12-month price estimate for Mellanox to $65 from $68, reiterating a buy rating.
The Tel Aviv shares lost 1 percent today to 147.5 shekels, or the equivalent of $41.12.
Gazit-Globe, a real-estate company based in Tel Aviv, sank 3.4 percent to $13, sliding the most in two months. Trading volume on the stock was twice the daily average over the past three months. The Tel Aviv shares slid 0.9 percent today to 46.17 shekels, or $12.87.
Prolor jumped 3.9 percent to $7.73 in New York, the highest level since June 2010. The Tel Aviv listing of Opko, which announced in April a deal to acquire Prolor, would enable Opko to pay Prolor shareholders in locally listed stock.
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