Israel Chem shares sink after India-Silvinit deal
By Steven Scheer
JERUSALEM (Reuters) - Shares of Israel Chemicals (ICL) slid nearly 9 percent on Sunday after India late last week signed a potash deal with Russian producer Silvinit at a price sharply below market expectations.
ICL shares ended down 8.7 percent at 35.60 shekels, by far the biggest decliners on the Tel Aviv Stock Exchange (TASE).
As the second largest company traded on the TASE, ICL's decline helped push the overall TA-100 index down 1.2 percent.
India on Friday agreed to buy 850,000 tonnes of potash from Silvinit at a delivered price of $460 a tonne, analysts said, citing reports in Fertecon and FMB, well below the $625 to $635 per tonne range that all other major producers had proposed.
Shares of ICL, a maker of fertilisers and specialty chemicals, do not trade on Friday as the TASE is closed.
"Israel Chemical shares are likely to remain volatile in the near term as the market digests recent news and waits to see how demand reacts," Citi analyst Sophie Jourdier wrote in a client note. "Nonetheless, even on our worst case scenario, we still believe ICL represents good value."
Jourdier maintained a "buy/high risk" rating and target price of 45 shekels for ICL.
"Israel Chemicals is one of the best placed potash producers globally given its very low-cost production from the Dead Sea and low capex costs. We estimate the company will generate strong cash flow for the medium term," she added. Continued...
Dubai Debt Fears
Banks outside the Gulf played down their exposure to Dubai debt, after fears the emirate could default and even derail world economic recovery prompted a sell-off in global markets. Full Article | Slideshow
India Investment Summit 2009
Top executives and bankers discuss their own plans and the broader opportunities and challenges for India. Full Coverage






India
US
UK










