'Dual-listing' Brings Half Dozen Israeli Firms Home to Tel Aviv Market
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[JANUARY 31] TEL AVIV - Despite the current disruption in Israel's security and the yearend downturn on Nasdaq, the Tel Aviv Stock Exchange has already seen a half-dozen Israeli companies that are publicly traded in the U.S. dual-list in Israel - with more to come. TASE senior vice president Ronit Harel Ben-Ze'ev said dual-listing came at the worst possible time last October, literally two weeks after the outbreak of Palestinian-Israeli violence and during a major market swoon in the U.S.
"It isn't the best time for companies to make decisions and changes," she said at a press briefing Wednesday.
TASE Chairman Yair Orgler said the dual-listing process, which began after years of public and private squabbling in Israel, could bring 50-60 of the 80 larger Israeli companies that now trade only in America to Tel Aviv, as well.
"There is tremendous potential for the coming years," he said. "If the environment improves, I think we will see an influx of companies."
Many of the Israeli companies on U.S. markets today are technology infrastructure and Internet companies that sought U.S. listings for exposure to the American market, liquidity and tax benefits. They had shunned the TASE for the same reasons: lack of exposure to the larger world of technology, convoluted reporting requirements and thin trading volumes.
Under the new rules, any company eligible to trade on major U.S. markets simply must file a one-page form and start trading three days later. Hebrew-language documentation is not necessary. There aren't even any fees, Orgler said with a smile.
Four of the companies now trading in Tel Aviv markets since the imposition of the new rules are technology companies. They include Tower Semiconductor, Metalink and Magic Software.
In contrast to some companies' concerns, Orgler said, overall trading volume has risen, with trading in Israel not reducing liquidity in the U.S. From 8-28 percent of the companies' trading volumes are now in Israel, he said.
Not only is the TASE getting U.S.-traded companies, it also is becoming the home for new Israeli-based ones, as well. The market saw a record 41 IPO's last year, with half of them "New Economy" high tech companies. TASE is looking to become sort of a stock market incubator by providing a home for smaller companies until they can meet the financial requirements of Nasdaq or European markets.
Despite the growth of dual listings for well-known firms with significant U.S. operations, it remains difficult for non-Israeli retail investors to invest in TASE securities. The Israeli banks that have control over trading on the TASE require non-Israelis to open accounts in Israel to conduct trades, rather than going through their existing brokerage accounts.
There may be more interest in trading directly on the TASE as Israel continues its privatization of major state-owned companies. Telecom monopoly Bezeq may hit the market soon with at least some shares, after the government finds a strategic private secotr partner in the global telecom market to take a major stake in the company.