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The Ministry of Finance folded: what happened to the shares of the food importers? - Walla! Of money

2023-03-02T07:46:40.308Z


In the shadow of the government's concession on the fight against the cost of living, which was manifested in the removal of the import reform from the Law of Arrangements, we went to check what is happening to the shares of importers and manufacturers of food and toiletries


Shares of food importers and producers (Photo: ShutterStock)

The fight against the cost of living, in the form of limiting the power of the major importers, was abandoned by the government that committed to it - and came out of the state budget - and the results were not reflected in the stock market, when investors returned to expressing confidence in the importers.

Will the consumers also join this expression of confidence and put up with the exorbitant prices?

We'll see.



A week after the passage of the state budget for 2023, we returned to the shares of the major food and toiletry importers traded on the Tel Aviv Stock Exchange, which until a week ago suffered from a downward trend in their prices.

Since the passing of the budget, they have increased by about 0.55% on average.



The increase sounds almost negligible, but when you check it compared to the TA 90 and TA 125 indices - which decreased by 2.62% and 1.64% respectively, for the same period - it is a very nice relative increase.

The public struggle with the cost of living weakened them, but the government's capitulation made them smile.

The shares of the major importers (photo: Walla! system, no)

A small correction for a big loss

The major importer stocks, however, still have a lot of catching up to do.

Thus Diplomat, for example, whose stock increased in the period examined (see table) by 2.38%, is still down 14.43% since the beginning of 2023 and down 31.56% since the beginning of 2022, during which it shed hundreds of millions of shekels from its value.



It is not surprising that Diplomat was the one that experienced the sharpest increase in its stock after the government program to fight the cost of living was removed from the budget, since it is the weakest in importing and distributing some of the international brands that are known and sold in Israel.



Among its brands are Gillette, Tuna Star Kist, Illy Coffee, Heinz sauces, Pampers diapers, Oreo cookies, Tampax hygiene products, Fairy dishwashing liquid, Bonzo pet food and Dorsal batteries and more.



The three importers that were examined decreased by 11.9% each on average since the beginning of the year, and this compared to the TA 90 and TA 125 indices, which decreased 6.67% and 3.56% for the same period.



The upward trend in the shares of food importers did not affect all of them.

Thus, the net share of Melinda, which is one of the five largest food groups in Israel, and among its brands are: Delidd, Williger, the three bakers, Tivon Will, Rich, Chef Segev, and more, continued its downward trend and shed several hundred million shekels from its value.



The food importer's stock fell by 1.51% in the last week, by 12.47% since the beginning of the year, and by 31.53% since the beginning of 2022.



The declines occurred even though in early January the company reported on the approval of the terms of employment of joint CEO Ofer Lev and on February 20 reported that The Phoenix-Excellence insurance company became an interested party in the company after 4 days before it purchased shares for approximately NIS 11.3 million.



With it, the shares of most of the local food producers also fell, in which investor confidence, apparently, has not yet returned, perhaps due to estimates (which at least in January were wrong) of an expected decrease in the scope of private consumption that would also be expressed in the food industry, leading each of them to shed about 0.52%% on average from the price of their shares since the approval of the budget by the government, and about 11% since the beginning of the year.



The biggest decliner is Strauss, which is traded on the Tel Aviv Stock Exchange at a value of approximately NIS 9.5 billion after its stock fell by approximately 3% for the period under review, bringing it down to approximately 13.7% since the beginning of the year, despite what appears to be a recovery from the salmonella crisis that shut down the Strauss candy factory. Elite in the Galilee landscape.

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Shares of food producers in Israel (photo: Walla! system, no)

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Sano, on the other hand, is the only one of the examined companies that experienced an increase in its share, which stood at 2.4% for the examined period, and reduced its decline since the beginning of the year to 10.74%.

This despite the fact that there were no special reports concerning the company.



It should be noted that the downward trend in the shares of food importers and producers began with the increase in commodity prices and continued with the public protest against the cost of living.



But the public's attention these days is entirely directed to the legal reform/revolution, and for now the struggle with the cost of living has disappeared from the public discourse and allows food importers and manufacturers to continue operating under business certainty, which investors like very much.



The question that still remains in the air is what will happen to the stocks of importers and producers if and when the two political parties come to an understanding regarding the legal arena and public attention returns to the cost of living, and with it the attention of politicians and regulation.

  • Of money

  • our money

Tags

  • Import

  • Strauss

  • Snow

  • Cost of living

  • diplomat

Source: walla

All business articles on 2023-03-02

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