Two weeks ago, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) successfully completed the flotation of its assets in Russia (held by its subsidiary, AFI Development plc (LSE:AFID)) in London, raising $1.4 billion.
Bank Hapoalim (LSE: BKHD; TASE: POLI) analyst Tamar Brinker has now downgraded Africa-Israel to "Market Perform" from "Outperform" and set a twelve-month target price of NIS 540. Brinker believes that Africa-Israel's stock will experience further volatility on the Tel Aviv Stock Exchange (TASE), parallel to the trading in AFI Development in London, which "accounts for 60% of the value of the group assets."
Among the risk factors (on top of those in the Russian market), Brinker notes that the residential property sector in US is cooling down, but says that this market should not be treated as one entity - the state of the income-producing real estate sector is different from that of the residential property sector, just as the real estate market in New York is different from that in Florida.
Either way, attention is now focused on Africa-Israel's next offering, AFI Europe, which could also be floated in London. AFI Europe manages the Africa-Israel Properties Ltd.'s (TASE: AFPR) assets in Eastern and Central Europe. Africa-Israel Properties' shares have fallen 4% since the beginning of the month, while its parent Africa-Israel has lost 14%.
Published by Globes [online], Israel business news - www.globes.co.il - on May 14, 2007
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