“Israeli high tech has found a home at the Tel Aviv Stock Exchange,” says Chairwoman of the Israel Securities Authority
“Capital markets are enjoying a renaissance period,” Anat Guetta said during Calcalist’s investment conference. “High tech has returned to Israel. It’s no longer aiming to raise money in foreign markets”
“The phenomenon of having many IPOs in public capital markets isn’t unique to Israel,” Guetta said, adding that “we’re seeing that capital markets in general are flourishing during this period.”
Guetta believes that what’s happening in Israel is unusual, but in a good way. “The special thing that is happening here,” she said, “is unprecedented in scope. Many tech companies are discovering that Tel Aviv is a destination for their capital financing. It’s something that hasn’t happened for many years, maybe ever,” she said.
The chairwoman added that “this trend is welcome news for us. The authority has put several steps into motions during the past three years, even before my arrival, with the goal of making the Israeli capital market a more attractive ecosystem for tech companies. What’s most special about what we’re seeing today is that Israeli tech has found its home here, it has returned to Israel. It isn’t looking to raise money in foreign markets.”
Guetta added that “We at the authority, together with the Israel Innovation Authority and other regulatory partners, have led moves that will allow more institutional investors become players in the tech financing game. We have launched research agencies among the institutional investors in the tech fields and established a go-to address for high tech investments in the institutional market. During the coronavirus (Covid-19) crisis, the Israeli government along with the Ministry of Finance and the Innovation Authority devised a safety net for institutional investments in high tech. This strengthened their sense of security in the market. The processes that we promoted generated the perfect storm and led to the reality that we have seen over the past few months, that many companies come to Tel Aviv to raise capital.”
We are seeing small-scale fundraising, but we aren’t at the stage yet where there will be an Israeli version of the NASDAQ. Are there steps that you are planning to take to encourage larger tech companies to issue on the Tel Aviv Stock Exchange?
“We would, of course, be happy to see the large Israeli tech companies come to Tel Aviv. The change in atmosphere and the perception of the market is good news for us. The companies that are coming are mostly medium-sized, though some could be considered large companies relative to the local market. There has even been interest by Israeli companies that are categorized as ‘unicorns’ to register a double listing on the stock market or conduct an IPO. In the previous quarter, 18 tech companies raised money on the exchange. During the next quarter, there will be more than 100 prospectuses filed. These are processes that will increase over the next few years. In the future, the large companies that we want to see, will appear on the Tel Aviv Stock Exchange. It’s definitely doable.
What is the leading trend for next year?
“I think that the sectors that grew during 2020 will continue to do so in 2021. We have seen great prominence by the various tech sectors and in the field of renewable energies. These will continue to set the tone next year as well. The transformation of the economy and the transition to digitalization will continue in the future. I estimate that the fintech field will be one of the tech sectors seeking to raise money on the stock exchange, and that we’ll see the first signs of that in 2021.”