A two-man team from the Australian Securities Exchange is visiting Israel this week to drum up listings of Israeli high tech companies on the Australian exchange, which in 2016 saw more technology-based initial public offerings from all over the world than the Nasdaq did.
“We are coming to Israel both to learn the market and as a response to the strong interest we have seen from local tech companies to list on our exchange,” said Max Cunningham, the general manager of listings at the exchange, in a phone interview ahead of the visit. This is his third visit to Israel, and this time he is coming with one other exchange colleague.
“Our job in our meetings in Israel will be to present the ASX story to technology companies that are seeking to raise money,” he said. “Our message will be: speak to us. Companies shouldn’t list their shares too early, but they should definitely talk to us early on, so we can help them be ready when the market is right.”
Eight Israeli tech companies listed their shares on the ASX in 2016, including three in December: HearMeOut, restaurant tech firm Dragontail, and UltraCharge, a maker of lithium ion battery technologies, bringing to 12 the number of Israeli companies that have their shares traded on the exchange. Israel now has the sixth-highest number of foreign shares traded on the exchange. New Zealand has 49 companies traded on the exchange, followed by 45 for China and 34 for Singapore. The UK has nine companies traded on the exchange, and places seventh on the ranking.
“Last year was a good year for the exchange, and we saw over 130 new listings, 95 percent of which were initial public offerings,” Cunningham said.
Even so, a cooling of the market was felt. “There was an increased number of listings, but at lower size.”
During 2016, there were 26 new tech IPOs, he said. There were 19 information technology initial public offerings on the Nasdaq in 2016, according to data compiled by Bloomberg.
Cunningham said he expects the inflow of Israeli companies to remain strong. “We are already seeing some 12 companies from Israel in our pipeline for 2017,” he said. “Not all may pan out, but hopefully most.”
The performance of the Israeli companies traded on the exchange has been mixed. Dragontail’s shares have surged 63 percent since its listing on December 21. HearMeOut has declined 20% since its listing on December 16, compared with a 3 percent gain of the ASX 200 index for the period. UltraCharge has plunged 36% since its listing on December 21. Audio Pixel Holdings Ltd., a digital loudspeaker developer, has surged 232% since listing in February 2011, compared with an 18% gain of the ASX 200 for the period, according to data provided by the exchange, and Emefcy Ltd., which makes wastewater treatment solutions, has jumped 280% since listing in December 2015, compared with a 9% advance of the ASX 200 gauge.
Turning away from Tel Aviv Stock Exchange
The ASX has been focusing efforts on encouraging foreign companies to list on its exchange. It has been actively investing time and money in helping startup companies grow, mentoring them and investing in incubators and accelerators. It facilitates connections with VCs and small funds and then assists them to map out what should they look like as a public company, and how long they should wait before selling shares to the public.
Meanwhile, the number of Israeli companies choosing to go public on the Tel Aviv Stock Exchange has been in steady decline. The Israel Securities Authority and the Tel Aviv Stock Exchange have been trying to ease regulations to encourage small and medium Israeli tech companies to list their shares on the exchange — as companies like Check Point Software Technologies Ltd. and Wix.com Ltd. have traditionally preferred offering their shares on the Nasdaq, to be closer to their markets and avoid burdensome local regulation. At the end of 2016 there were 73 Israeli companies listed on the Nasdaq, according to data provided by the Bank of Israel.
Three companies held initial public offerings of shares on the Tel Aviv Stock Exchange in 2016, raising a total of $68 million, according to exchange data, and three companies dual-listed their shares on the TASE. In total some eight new companies listed their shares on the TASE in 2016, including three dual listings and two companies that listed shares following a spin off or capital restructuring. This compares to a record of 62 new listings, of which 56 were initial public offerings, on the exchange in 2007.
There were 130 high-tech companies listed in Tel Aviv at the end of 2016, 55 of which are in the biomedical sector. As of end 2016, the shares of 451 companies were traded on TASE, as opposed to 461 at the end of 2015.