"The New York Stock Exchange today is very different from what it was before the global economic crisis, and the "new New York Stock Exchange" should be of great interest for growing Israeli businesses, particularly those in one of Israel's great strengths, the technology sector," said NYSE Euronext (NYX) VP, Head of International Listings EMEA and Asia Ronald Kent. He was interviewed by "Globes" recently when he attended the Ernst & Young and "Globes" Israel Journey 2010 Conference on Israel's high-tech, biotechnology and venture capital industries.
Kent said, "NYSE Euronext has defined as a top strategic priority bringing outstanding growth companies, particularly those in the technology sector, to trade on the exchanges we manage, and the wave of IPOs that began with Silicon Valley and Chinese companies has now reached Israeli companies. Today, there are only 13 Israeli companies, or those with Israeli management, that are listed on the different exchanges that the company manages - but the intention is to change the picture, and today more than ever we have something to offer them."
In recent years the New York Stock Exchange, which was managed over the years as a not-for-profit institution, has become a public company which manages and operates various stock exchanges in the US, and has merged with leading European exchange group Euronext, which manages and operates leading exchanges in Europe. In addition, the company recently rolled out its 21st century high-tech super-fast and resilient trading platform, the "Universal Trading Platform" (UTP). Kent explained, "That is a critical foundation for any truly global leading exchange."
He stressed that the systems combine the activities of the various securities traded on the different stock exchanges managed by the company, and enables liquidity in trading between leading global markets with an efficiency not yet seen.
Israelis can choose - the Chinese have already chosen
He said, "Before the global economic crisis most growing Israeli businesses could only choose to list in the US on Nasdaq - and that is why Nasdaq is so well known in Israel. But today Israeli companies have a choice. They can also choose to list on the NYSE."
He continued, "Indeed companies with a market capitalization at IPO of $150 million or more can choose the NYSE and those that are smaller can choose the leading US exchange for smaller capitalization companies that NYSE acquired just around two years ago, the American Stock Exchange, now renamed "NYSE Amex". This is all the result of the NYSE's strong refocus on the best emerging growth companies."
When asked why leading Israeli companies would be interested in what the NYSE has to offer, Kent said, "There are many reasons, but perhaps the best are looking at what the leading growth companies in the technology sector around the world are choosing to do today when they want an IPO in the US markets. Among the top US technology businesses in Silicon Valley and around the US, six out of every ten are choosing to IPO on NYSE. Among the top Chinese technology businesses wanting to raise capital on US markets, nine out of every ten are choosing to IPO on the NYSE. Now growing Israeli companies will also have a choice if they wish to raise capital in the US."
One third of the world's cash equities are traded on NYSE Euronext
NYSE Euronext is the largest financial markets operator in the world and provides the leading trading technologies in the global financial sector. The company operates trading platforms in seven stock exchanges in the US and Europe, and seven derivatives exchanges in five countries on which futures contracts, options, bonds and other products are traded.
One third of the world's cash equities are traded on NYSE Euronext. The companies traded on NYSE Euronext had a market value of $22.2 trillion as of September 30, 2010. Assets worth $96 billion are traded every day on these exchanges. 8,000 issues from companies in 55 countries are traded on NYSE Euronext exchanges, with 70 of the world's 100 largest companies listed.
Kent said that the NYSE is no longer just for blue chips stocks. "If you look at the 50 leading companies on the Dow Jones and S&P 500 indices you can see what has happened over the past 30 years. The first thing is that investments have expanded in companies that are not blue chip companies and here is the place to again mention the technology sector, where the volume of trade and its speed have grown exponentially in a way appropriate for the Internet generation. An Internet year is somewhat similar to a year in the life of a dog - equivalent to seven human years - the world moves today at very great speed and we are without doubt keeping pace."
After being impressed by the extent of the NYSE-Euronext's global activities, the tiny operations of Israeli companies on their exchanges stand out. Only 13 Israeli companies, or companies whose management is Israeli, are listed for trading on its markets. 4 of those companies are incorporated in the US, and the total market capitalization of all 13 is $13.6 billion. Referring to those figures, Kent said, "There are good reasons for the low level of activities by Israeli companies on NYSE, but the good reasons are very bad and the reason that I am here is because we recognized that Israel is much more important to us than reflected until now. This is the first step, we intend to deal with this situation and correct it."
Amdocs Ltd. (NYSE: DOX), which trades on the New York Stock Exchange, at a $5.9 billion market cap, is the largest Israeli company on the NYSE in terms of market cap. However, it is incorporated in the US, along with Ormat Technologies Inc. (NYSE: ORA), Alon USA Energy Inc. (NYSE:ALJ), and Delek US Holdings Inc. (NYSE:DK). Among Israeli firms incorporated in Israel, trading on the NYSE, the one with the largest market cap is Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL),with a $3 billion market cap (as of September 30). It is joined by Blue Square Israel. On the NYSE-AMEX there are three Israel-incorporated companies: Protalix Biotherapeutics Inc. (AMEX:PLX), Hadera Paper Ltd. (AMEX: AIP; TASE: AIP), and Prolor Biotech Inc. (AMEX: PBTH). On the European stock exchanges belonging to NYSE Euronext, four other companies trade, with the biggest being Kardan (TASE: KRNV;AEX:KARD), which has a market value of $570 million.
NYSE-Euronext officials, headed by Kent, were in Israel last week and met with senior government officials, with Israeli companies, with venture capital funds, with heads of banks, and with heads of the Tel Aviv Stock Exchange (TASE). This was all in order for Israeli companies to hear what the NYSE Euronext has to offer to them. "We know that Israelis are very proud, very independent, and have high standards - and we intend to give them the services they seek."
Recently, the New York Stock Exchange hosted "Israel Day", where honors were extended to Shari Arison, Bank Hapoalim (TASE: POLI), and Noble Energy, a partner in the exploration of large gas reserves offshore Israel. Kent, who previously worked for many years in leading roles at Goldman Sachs and Morgan Stanley, said that he met there his friend from long ago, Bank Hapoalim chairman Yair Seroussi. He said, "I was very happy to see Yair standing on the podium in New York and receiving the award on behalf of Bank Hapoalim, a bank which I hold in very high regard. I was happy to see that he won such a respected honor - but I was not surprised by it at all."
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2010
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