Faced with the reality of more than 100 Israeli companies with Nasdaq
listing, the European smaller markets are focusung on Israeli technology
driven startups for initial public offerings as well as "double listings".
They are aiming to get a piece of the trading cake and currently that means
wooing Israeli startups .
However, the Europeans say that though only a few dozen high-tech
companies have listed themselves on Europe's markets, nevertheless their
Exchanges have much to offer new issuers. They quote Israeli technology
analysts who say that Europe has lagged behind in attracting Israeli
companies, largely because interest there in high-tech stocks took longer
to gain momentum than in the United States. They insist that European
investors are now ready to absorb high-tech and internet stocks.
Unfortunately, it a fact that when European Exchanges hurry to attract
listings, they tend to lower the requirements for listing to a level which
may prove to be detrimental to shareholders. Companies which are listed
prematurely have a subsequent poorer stock market performance than their
more patient brethren. While the number of Israeli issues in Europe is
increasing, some Israeli companies say Europe still lacks a well-developed
community of investors and analysts.
At a recent meeting with top executives of the TASE Managing Director Saul
Bronfeld conceded that the Exchange's "dual listing" proposal awaiting
approval of the Ministry of Finance may already have missed the boat. Due
to the many listings by Israeli companies on Nasdaq the TASE had sought to
obtain automatic listing on its exchange of any Israeli company when its
NASDAQ listing became effective. This sound idea, which if executed, would
provide the benefit of less expensive transactional costs on the TASE and
allowed the convenience of trading at hours when NASDAQ had as yet not
begun its trading day.
Another consideration is that this could also serve as a tool to enhance
peaceful relations with Israel's neighbors when "cross-border" trading
with Tel-Aviv will be adopted by Cairo, Amman and Beirut.
In checking what the Government is doing, IHTIR learned that the issue of
"double listing" is currently in the hands of the Ministry of Finance. The
office of the Finance Minister told us that an urgent request has been
forwarded to the Ministry of Justice to draft a law for approval by the
Knesset, Israel's parliament. Existing restrictions would first have to be
removed to pave the way for approval for the simple procedure for "double
listing". An optimistic guess would be that such an approval would not
become a law before the end of this year. It seems that for the Tel-Aviv
Stock Exchange, for all of its willingness and technological ability to
handle trading around the clock, it is a case of missed opportunities
because it is fair enough to assume that more nimble Israeli high-tech
companies will follow the example of Check Point Software Technologies
(Nasdaq:CHKP), Mercury Interactive (Nasdaq:MERQ), Orckit Communications
(Nasdaq:ORCT) and Galileo Technology (Nasdaq:GALT), will be the first
Nasdaq-listed Israeli shares to trade on Easdaq. Delighted Easdaq chief
executive Steven Schubert said there are discussion being held to include
additional companies from this country. To date, 15 Nasdaq-listed companies
trade on Easdaq, all high-profile technology stocks including Microsoft,
Cisco Systems and Intel. Two Israeli companies -- Supercom and IT
International Theatres -- went public on Easdaq in 1999.However, the
Europeans should not take anything for granted, as Nasdaq chairman Frank
Zarb along with key executives has visited Israel last month to meet Prime
Minister Ehud Barak and economic officials ,who have invited the U.S.
exchange to consider cooperation with the Tel Aviv Stock Exchange.
As for the Tel-Aviv Stock Exchange --- it has experienced a recent best
year in 1999 with equity prices up sharply by 65% in dollar terms. We
shall not shed too many tears for the TASE. At the beginning of the
millennium there were ten high-tech issues in the initial public offering
pipeline awaiting approval for listing. TASE Chairman Prof. Yair Orgeler
and Managing Director Saul Bronfeld are hopeful that these will include a
few big time future winners such as CheckPoint Software and Comverse
Technologies whose combined market capitalization on NASDAQ currently
exceeds $15 billion. The shares of these two companies experience daily
turnovers on Nasdaq which are greater the total weekly turnover on the TASE
or 2.5 times the average one day's turnover of all shares on the local
exchange. "With a little bit of luck one of the new issuers will become the
star of tomorrow.
The Tel-Aviv Stock Exchange (TASE) as an emerging nation stock market,
similar to the smaller European markets, among these Easdaq, launched three
years ago, Germany's Neu Market and the French Nouveau Marche appears to be
functioning firmly but inevitably in the giant shadow of Nasdaq. The
American Nasdaq market whose daily turnovers may exceed two billion shares
has made it clear that within the foreseeable future it will set up shop in
Europe and provide its services to the European listers. No one doubts that
it will be a hard act to beat The unified European stock exchange network
scheduled to be up and running by November 2000 has promised to provide a
single access to the eight European markets via the same electronic
interface. This flurry of activity has prompted Nasdaq to plan its own
trading platform Nasdaq-Europe.