"The financial sector's contribution to GDP is currently estimated in financial markets at over 9%, which means 10% growth in business activity by the financial sector. This increases the annual growth rate by 0.9%," said Israel Securities Authority chairman Prof. Shmuel Hauser at the "Globes" 2013 Israel Business Conference's "Measuring economic freedom" panel. "It is a national task to make the Tel Aviv Stock Exchange (TASE) accessible to high-tech companies. We want to get rid of the exit culture of high-tech companies in favor of keeping the human capital and business activity in Israel."
The Securities Authority estimates that each $1 of a sale of a company abroad costs a direct and indirect loss of at least $3 to the economy and country. "The transfer of high-tech companies' business activity abroad is a sign that the economy has lost its way. Everyone should urgently contribute to solving the problem. We should consider slashing taxes for these companies to encourage them to raise capital on the TASE, on the condition that they keep their business in Israel," said Hauser.
"We want on the TASE more Tnuva, Check Point, and Mellanox-like private, government, and high-tech companies," added Hauser.
Commenting on remarks by Mellanox Technologies Ltd. (Nasdaq:MLNX) CEO Eyal Waldman about burdensome regulations causing the company to delist from the TASE, Hauser said, "Dual listing contributes to the liquidity of a share, and therefore has a positive effect on companies' value. Furthermore, it seems to me that a little Zionism won't hurt the Israeli capital market. More than 40 Israeli companies have raised capital on US stock exchanges, and I would be very happy to see them listed for trading as dual-listed companies in Israel."
Hauser said, "If companies such as Check Point Software Technologies Ltd. (Nasdaq: CHKP) were listed on the TASE, and companies like Tnuva Food Industries Ltd. were to raise capital, it would boost TASE turnover by 20%." He added that companies, such as Alcobra Pharmaceuticals Ltd. (Nasdaq: ADHD), SodaStream International Ltd. (Nasdaq: SODA), and Caesarstone Sdot Yam Ltd. (Nasdaq: CSTE) which have listed in the US could list their shares on the TASE under the Dual Listing Law. As for listings by government companies, he said that they needed exposure.
"If we decide to privatize the TASE and adopt most of the recommendations of the liquidity committee chaired by Prof. Mosh Ben-Horin, we estimate that, within three years, it would be possible to boost trading volume on the TASE to NIS 3-5 billion a day," said Hauser.
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2013
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