Australia Securities Exchange, wooing Israeli tech, seeks dual-listing with TASE
20 Israeli firms are now on the ASX, but future listers are expected to be more developed and raise more money, ASX head of listings says
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
The Australian Securities Exchange (ASX) has put in a request for Israeli regulatory approvals that will allow companies listed on the exchange Down Under to list in Tel Aviv as well, according to Max Cunningham, executive general manager of Listings at the ASX.
The arrangement would allow Israeli or Australian firms that have listed on the Australian exchange to also list their shares in Israel.
“We have made an application with the securities regulator” in Israel, Cunningham said in an interview in Tel Aviv. The dual-listing of shares is beneficial for companies because it helps firms “access broader pools of capital” from a wider variety of investors, he explained.
Israel Securities Authority chairman Anat Guetta told Reuters earlier this month that Israel may expand the dual listing arrangements it has with exchanges to include Australia, as the Tel Aviv Stock Exchange (TASE) tries to draw more investors and companies in order to boost dwindling trading volumes. Companies whose shares are traded in New York, London, Hong Kong, Singapore and Toronto are currently allowed to dual-list their shares in Tel Aviv.
“I am very hopeful and optimistic that we can get some recognition here” in Israel, Cunningham said. “The ASX sits very comfortably” with those exchanges with whom Tel Aviv has dual listing arrangements, he said, “both from size of company and market and our rules regime.”
The Israel Securities Authority, in response to a question on whether the TASE had made a reciprocal request to the Australian Stock Exchange and the Australian regulator to get dual-listing approval for companies that trade on the TASE, did not respond directly but said, in a text message, that it was continuing to weigh the possibility of expanding dual-listing to other exchanges, should such a move prove advantageous to the country’s capital market and broader economy.
Cunningham is in Israel this week with a delegation attending the third annual ASX in Israel Week, which holds events and meetings with Israeli firms and startups in a bid to drum up their interest in raising funds on the ASX.
The delegation is led by ASX chairman Rick Holliday-Smith, and consists of some 15 members, including representatives from the Australian funds management industry.
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 the startups to map out what should they look like as a public company, and how long they should wait before selling shares to the public.
There are 20 Israeli firms that have listed shares on the ASX. They have had an average return of 53 percent and a total market capital of $1.19 billion. Israel is the nation with the third-highest number of foreign companies traded on the exchange, following New Zealand and the US, data provided by the ASX shows.
Four Israeli companies listed their shares on the ASX in 2018 and one, fintech firm Splitit Payments Ltd., listed its shares in 2019, raising AUD$12 million ($8.3 million).
The pipeline of Israeli companies seeking to list on the exchange “is thin at the moment,” Cunningham said. Israeli firms still prefer to raise funds via private equity or VC funds or via mergers, he added, but the exchange officials’ visit to Israel and the ASX in Israel Week help open doors and generate interest.
The Israeli companies they are now meeting are more mature than the ones that have listed to date on the ASX, so if and when they come to the exchange they will likely raise more money at higher valuations, he predicted.
Most of the 20 Israeli companies listed on the ASX are very early-stage, pre-revenue startups, he said, that raise an average of $15 million to $20 million and have an average market cap of around $50 million. “The ones we are engaged with now are bigger,” he noted.
The ASX, meanwhile, is having “huge success” in attracting US tech firms, he said.
On May 10, Life360 Inc., a US family-tracking app operator, raised $104 million through a share offering that was the biggest US tech IPO to date on the ASX.
The US firms that are seeking to trade on the ASX are raising more money, around $100 million-$200 million, than some three years ago, Cunningham said. “We still haven’t had an Israeli company that has done that size. It takes time.”
The ASX is investing a massive effort in the Israeli market, he said, because it “has so much innovation. Every stock exchange that I am aware of has an Israel strategy.” And there is huge “investor hunger” for these shares, he said.
For now, the aim of the ASX is to make sure that Israeli firms that want to raise funds know that accessing Australian money and investors is a good option for them, Cunningham said.
“Private money is the biggest competitor to us,” he said. “Our goal in the US and in Israel is to be part of the conversation.”
