Israeli Energy Sector Sees Major Deals Canceled, Stock Market Prepares for Short Week

Nofar Energy, owned by Ofer Yanai, is reportedly seeking to sell its core solar rooftop and storage operations for approximately 600 million shekels. The company aims to receive 300 million shekels in cash and the remaining 300 million shekels as a one-year seller's loan at 6% interest, totaling 318 million shekels to be paid in a year. This move signals a potential shift in Nofar's strategic focus.

In parallel, the partnership managing the Leviathan natural gas field has announced the cancellation of a significant gas supply deal with Dalia Energy, valued at an estimated $6.7 billion. NewMed Energy and Ratio Energies, holding a combined 60% stake in Leviathan, informed Dalia of the agreement's termination, citing the failure to meet stipulated conditions for its activation. Dalia Energy disputes the validity of the cancellation notice.

Market speculation suggests the primary reason for the Leviathan deal's collapse is the Israeli Competition Authority's objection, which reportedly opposes the agreement due to concerns over market concentration in supplying gas to private power stations. NewMed Energy has not officially disclosed the specific unmet condition that led to the cancellation.

The Tel Aviv Stock Exchange is entering a shortened trading week, concluding the third quarter on Wednesday. The TA-35 index has risen 4.3% this quarter, the TA-125 by 2.2%, with the banking index surging over 17% and the insurance index jumping 23%. Trading will be closed on Friday for Sukkot and Shemini Atzeret holidays, and will have early closures at 2:30 PM on other trading days due to the intermediate festival days.

Global market sentiment shows slight declines in US index futures, following a positive close on Wall Street last Friday. Israeli chip stocks like Tower, Nova, and Camtek are expected to open with a positive arbitrage of over 2%, as is Ormat. Conversely, Nice and Palo Alto are anticipated to open with negative arbitrage. Strong increases in oil prices, with Brent up 2% and WTI up 1.5%, could impact local oil and gas companies. US 10-year bond yields are at 5.20%, while Israeli 10-year bond yields stand at 40.6%.