JERUSALEM, Aug 8 (Reuters) – Cellcom , Israel’s largest mobile phone operator, posted a 25 percent drop in second-quarter profit that missed forecasts and said it expected regulatory changes and increased competition to continue to weigh on its performance.

Cellcom and rivals were hit at the start of 2011 by a steep reduction in fees mobile phone operators charge each other to connect calls and the elimination of exit fines for customers.

“We continued to see the impact of the regulatory changes and the accelerated competition on our results as well as on the whole market,” Yaacov Heen, Cellcom’s chief financial officer, said in a statement on Monday.

“The reduction of interconnect fees and the continued price erosion had an adverse effect on our service revenues and profitability and we estimate that they will continue to affect our results,” he said.

Shares of Cellcom, a unit of IDB Holding , fell 1.8 percent in Tel Aviv.

“I do not see good news in the near future in the sector so I still recommend avoiding the sector,” said Ori Licht, head of research at the IBI Investment House.

Competition in the mobile phone market, which is dominated by three companies led by Cellcom and whose penetration rate is well above 100 percent, is set to intensify.

JERUSALEM, Aug 7 (Reuters) – Israel’s banking system is strong but banks’ Tier 1 capital reserves are far too low compared with those in other Western countries, Israel’s chief banking regulator said on Sunday.

David Zaken, the Bank of Israel’s Supervisor of Banks, said the current minimal requirement for Tier 1 capital was 7.5 percent to its risk.

“It will be higher,” Zaken told a news conference. “We expect banks will raise their Tier 1 capital.”

He declined to say what the new minimum will be but it will be raised to conform to new Basel 3 regulations. Regulations, he added, may not be uniform but could be bank specific.

At the end of 2010, Israeli banks had Tier 1 capital adequacy ratios of 8.0 to 9.1 percent — well below the OECD average of about 12 percent. Including Tier 2, Israeli banks’ adequacy ratios were 12.5 percent to 15.1 percent, versus an OECD average of 14.5 percent.

“All banks in developed countries have already raised their core capital,” Zaken said. “This is the trend and we cannot ignore this trend. But they (Israeli banks) have time to do it.”

However, raising Tier 1 capital may limit banks’ dividends.

LONDON/JERUSALEM, Aug 1 (Reuters) – Teva Pharmaceutical Industries’s experimental multiple sclerosis pill laquinimod missed its main goal in a late-stage trial in a major setback for a drug being developed with Active Biotech .

Awkwardly for Teva , while its new drug failed to show an improvement over placebo in either relapse rates or disability progression, the study did show a benefit for Biogen Idec’s rival beta-interferon injection Avonex.

Patients on Avonex had a lower annualised relapse rate (ARR) than those on placebo, although, like laqinimod, it did not improve disability progression as measured by the expanded disability status scale (EDSS).

Teva officials told analysts on a conference call it remained committed to laquinimod and stressed that not only will it have no trouble getting regulatory approval, the drug is safe and should find a market among those with MS.

Investors and analysts were not convinced. After a more than 90-minute halt, Teva’s Tel Aviv-listed shares resumed trade briefly and slid 7.2 percent.

Its Nasdaq shares were 7 percent lower at $43.36 in morning trading, while its small Swedish partner Active Biotech slumped 53 percent. Biogen rose 2.1 percent by 1452 GMT.

“It’s a bit of disappointment for investors. It’s not something the market expected from Teva,” said Sabina Podval, an analyst at Leader Capital Markets. “The drug launch and approval process now looks more complicated.”

JERUSALEM, July 27 (Reuters) – Customer relations software provider Nice Systems raised its revenue and profit projections for 2011 on Wednesday, riding a wave of increasing contact between companies and their customers.

“You can’t say now what could have been in a better economy but overall, our business is growing at double-digit growth and we see even stronger growth in profit,” said Dafna Gruber, Nice’s chief financial officer.

“We could cross $800 million (in revenue in 2011) but we’re not sure yet,” she said, noting that its business in emerging markets such as Brazil, China and India was growing the fastest.

Israel-based Nice bumped up its full year revenue projection to $785-$805 million from a previous $780-$803 million. It also increased its 2011 earnings per share forecast to $2.00-$2.08 from $1.96-$2.06.

Gruber said Nice has benefitted from an increase in customers’ interactions with companies, which Nice’s systems analyse. Customers, she noted, communicate with companies in more ways than ever — mobile phones, Internet chat and email in addition to voice.

Nice also has a security and video surveillance business, which accounts for about 23 percent of revenue.

Gruber said such products have been growing well due to an increased need to protect against threats of terrorism as well as financial crimes.

JERUSALEM, July 26 (Reuters) – Prime Minister Benjamin Netanyahu pledged on Tuesday to implement “huge” housing reforms next week to try to stem growing protests against the high cost of living in Israel that have sapped his popularity.

Student-led activists have set up tent camps and held often rowdy sit-down demonstrations in Israeli cities this month to demand lower rent and land-ownership prices.

In parallel, doctors have intensified a more than four-month-old strike for better wages and conditions, spreading the sense of crisis among a middle class that bears Israel’s heavy tax burden and sustains its conscript military.

“The housing crisis in Israel is a real problem. This is not a fake issue and whoever has empathy in his heart understands it is a problem,” Netanyahu said in remarks to reporters broadcast live on television and radio stations.

He unveiled a plan, dubbed “Residence in Reach”, under which the broad-based, conservative coalition government would enable the sale of more state-owned land, provide low-rent housing for students and the poor, and cut through red tape on realty deals.

“We will complete two huge changes next week, because ultimately you have to breach the bureaucracy,” said Netanyahu, a free-market champion who, as finance minister under a previous administration, leaned on Israel’s public sector spending.

His promise on student housing received a smattering of applause from demonstrators watching the news on television in Tel Aviv. They dismissed other remarks as “spin”, ?churning their hands in what has become the protest’s signature gesture.

JERUSALEM (Reuters) – Prime Minister Benjamin Netanyahu, his approval rating hit by a cascade of popular protests against the high cost of living in Israel, pledged on Tuesday to implement “huge” housing reforms beginning next week.

Student-led activists have set up tent-squatter encampments and held often rowdy sit-down demonstrations in Israeli cities to demand lower rent and land-ownership prices.

In parallel, doctors have intensified a more than four-month-old strike for better wages and conditions, spreading the sense of a crisis in a middle class that bears Israel’s heavy tax burden and sustains its conscript military.

“The housing crisis in Israel is a real problem. This is not a fake issue and whoever has empathy in his heart understands it is a problem,” Netanyahu said in remarks to reporters broadcast live on television and radio stations.

He unveiled a plan, dubbed “Residence in Reach”, under which the broad-based coalition government would free up more state-owned land for development, provide low-rent housing for students and the poor, and cut through red tape on realty deals.

“We will complete two huge changes next week, because ultimately you have to breach the bureaucracy,” said Netanyahu, a free-market champion who, as finance minister under a previous administration, cracked down on Israel’s public sector.

Though his pledge on student housing received a smattering of applause from protesters watching the news conference on a television relay in Tel Aviv, otherwise they moved their hands in a uniform gesture dismissing the remarks as spin.

By Steven Scheer

JERUSALEM, July 12 (Reuters Life!) – An Israeli company has developed an application that allows users of the newly launched social networking site Google+ to also view their streams from sector leader Facebook.

Called “Google+Facebook”, the application was developed last week by Crossrider, whose main business is developing Internet browser add-on extensions, and already has more than 100,000 downloads, according to Koby Menachemi, Crossrider’s co-founder and chief executive.

“It’s something we created in less than a day,” Menachemi told Reuters. “The product is not perfect, yet you can view (Facebook) streams and update your status” while on Google+.

After a nuber of prior failures, Google is betting that Google+, which already has more than 10 million users, will directly compete with Facebook, which has more than 750 million in the rapidly growing social networking industry.

While most would prefer to allow a simple importing of Facebook friends, photos and other personal information into Google+, that violates Facebook’s terms of service.

Crossrider’s application, which is free, just adds an icon to Google+, where users can view their Facebook pages.

JERUSALEM, July 11 (Reuters) – Israel kept interest rates on hold last month because the central bank expects slowing global growth will temper domestic growth and inflation and because it wants to keep the shekel in check, minutes of the June meeting showed.

The central bank left its benchmark interest rate steady at 3.25 percent at its meeting on June 27. It was only the second time in six months that the bank, which has been raising rates since August 2009 to cool inflation stemming from a rapidly expanding economy and soaring housing prices, left the rate unchanged.

“The slowdown in the rate of global growth and the implications of the debt crisis in Europe raise the level of concern over a deterioration in the real economic situation around the world and the postponement or slowdown in the rate of increases in interest rates in the major economies to normal levels,” the Bank of Israel said.

“Hence, it was necessary to deal with pressures for the appreciation of the shekel that are likely to increase due to the expected interest rate differentials,” it said.

The shekel already stands near a multi-year high versus the dollar but the central bank is worried that a stronger currency would harm exports — more than 40 percent of Israel’s economy. Exports have performed well despite weak global growth and a strong shekel but slipped in April and May compared with the first quarter when they grew an annualised 14.3 percent.

The Bank of Israel has raised its key rate 10 times since August 2009. Its own staff forecast rates will rise to between 4 and 4.25 percent in the second quarter of 2012 but it said risks include slower growth.

“The global slowdown was likely to cause a slowdown in the rate of economic growth in Israel, which would moderate the rate of inflation,” said the central bank, which projects growth of 5.2 percent in 2011 after a 4.8 percent spurt in 2010.

JERUSALEM (Reuters) – The economy is unlikely to return to recession provided there are no shocks on oil prices, U.S. housing or mishandling of the European debt crisis, former White House aide Larry Summers said on Wednesday.

Speaking at a conference in Jerusalem, Summers — a Harvard professor and former Treasury secretary under President Bill Clinton — said the odds were low there would be a double dip recession.

“The expectation is that U.S. growth will continue at 2 to 3 percent the rest of the year,” said Summers, adding global growth would be faster due to strong emerging markets.

The ex-White House economist said shocks to commodities prices, particularly oil due to unrest in the Middle East, could hurt growth prospects.

At the same time, there were also risks to the economy in the event of a mishandling of the European debt crisis and if the U.S. housing market stays weak, Summers said.

He also compared China to Japan in the 1980s, saying the country had a managed currency, low productivity, easy money and inflated assets.

While China is not expected to follow the collapse of Japan’s economy, Summers said it was “a possibility.”

JERUSALEM (Reuters) – Wall Street investors are a bit more pessimistic than they should be despite a host of negative factors such as a weak U.S. economy and high energy costs, Goldman Sachs strategist Abby Joseph Cohen said.

“The U.S. stock market right now is priced about 15 percent below where it should be,” Cohen told Reuters on the sidelines of the President’s Conference in Jerusalem on Wednesday. “Our feeling is the likely scenario is better than what investors are expecting.”

Goldman projects the S&P 500 index .SPX will reach 1,450 by year end and 1,500 in the next 12 months, from 1,295.52 on Tuesday.

Investors, she said, were rightly concerned about the economy, the European debt crisis, supply chain disruptions from the Japan earthquake, U.S. tornadoes, and higher energy prices, which act as a tax on the economy.

“The market is not pricing in the happiest of scenarios,” Cohen said. “Investors are climbing the proverbial wall of worry. But it is good for investors to be nervous. When investors are no longer nervous about anything that’s when you have to be worried.”

Such nervousness has led to good buying opportunities in the market — mainly in areas where the United States offers value added products such as technology and biotech, she said.

“Highly cyclical areas look interesting right now,” Cohen said. “We have great strength in investment in business equipment — technology, telecommunications, computer software and applications and also aircraft and avionics. U.S. companies are generating very good revenues in these categories.