Australians keen on Israeli shares as offerings rise

16 Israeli firms have listed their shares on the ASX, including 8 new listings in 2016 and 4 this year

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

G Medical Innovations, an Israeli provider of mobile e-health solutions, listed its shares on the Australian Securities Exchange on May 8, 2017 (Courtesy)
G Medical Innovations, an Israeli provider of mobile e-health solutions, listed its shares on the Australian Securities Exchange on May 8, 2017 (Courtesy)

The increase in investments in Israeli shares offered on the Australian Securities Exchange (ASX), along with the strong performance of these stocks, is a reflection of the Australian investment community’s keen interest in Israeli technology developments, a senior official at the exchange said.

“There is no doubt that the engagement and focus” on Israeli stocks has increased,
Max Cunningham, the general manager of listings at the exchange, said in a phone interview ahead of a visit to Israel in October. This is Cunningham’s fourth trip to Israel in the past 12 months, with the aim of drumming up more Israeli share offerings for the hungry exchange.

Cunningham will be accompanied by the CEO of the exchange, Dominic Stevens, who is heading a delegation of capital market professionals and investment banks from Down Under.

“We have two goals,” Cunningham said. “For those who come to Israel for the first time we want to make sure they see the dynamic Israeli entrepreneurship, the economy, the history of the country, the survival instinct that drives so much of the innovation that comes from Israel.”

Max Cunningham, the general manager of listings at the Australian Securities Exchange (Courtesy)

The second aim of the delegation is to meet representatives of the local capital markets, VC representatives and startup entrepreneurs to tell them about the possibilities of raising money in Australia at a relatively early stage of a firm’s development.

The timing of the visits will also coincide with that of Australia’s Prime Minister Malcolm Turnbull to celebrate the 100th anniversary of the Battle of Beersheba, which saw Australian and New Zealand forces join up with Britain to fight the Ottoman and German empires on October 31, 1917, beginning one of the offensives of the Sinai and Palestine campaign of World War I.

Sixteen Israeli companies have listed their shares on the ASX, including eight new listings in 2016 and four this year so far, according to data provided by the ASX. Of the four firms that listed their shares in 2017, G Medical Innovations, a provider of mobile e-health solutions which listed its shares on May 8, had advanced 110 percent as of September 17; Elsight Ltd., a security and surveillance data firm, had advanced 38 percent since its listing on June 8 while Mobilicom Ltd. and e-sense Lab Ltd. which also listed in May and June this year, respectively, had declined 33 percent and 15 percent as of September 17.

“The number of (Israeli) listings has come up, but most importantly when we look at different countries geographically, Israel probably has the best performing cohort of companies,” Cunningham said.

“These are early stage companies; you will always see a little bit of red in there,” he added. Some of these companies still need to prove their models, “but if you look at the most recent listings, G Medical and Elsight, they have done very well.”

Israel now has the fifth-highest number of foreign shares traded on the exchange, mainly small-sized companies, still representing just 1% of the total market capitalization of foreign firms on the exchange. New Zealand has 54 companies traded on the exchange, followed by 44 for China, 40 for the US and 17 for Singapore.

Israel’s Mobilicom, a maker of mobile wireless communications solutions, listed its shares on the Australian Securities Exchange in May 2017 (Courtesy)

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.

Australia has ranked fourth among global stock exchanges by deal volume to date in 2017, Martin Steinbach, EY Global and EMEIA IPO leader, said in a June report. Asia-Pacific’s position as the leading center of IPO activity will remain unchallenged through the remainder of 2017, he said.

The global IPO market in the first half of 2017 got off to one of its strongest starts in nearly a decade. The first half of 2017 saw proceeds rise by 90% to $83.4 billion and the number of deals increase by 70% to 772 IPOs compared with the first half of 2016. The first half of the year was also the most active by global number of IPOs since the first half of 2007. The data was published in June in the EY Global IPO Trends: Q2 2017 report.

Cunningham said that he expects to see three to six Israeli companies join the ASX in 2018, and one or two before the end of 2017.

The exchange’s measure of success, he said, is if it can get more companies to issue shares so that they can complement the portfolio of companies already on offer.

“It is our goal to make ASX a long-term capital partner for Israel,” he said. “It is hard to see this whole relationship between both economies and countries not continuing to expand, and ASX is a natural point for all of those opportunities to coalesce.”

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