IPO

Regulators Believe Jefferies’ IPO Will Increase Israeli Tech Listings

Israel is hoping to get more tech company listings on its stock exchange with help from U.S. securities firm Jefferies.

The Tel Aviv Stock Exchange (TASE), the main exchange in the country, has not traditionally been known for listings from high-tech companies. Many tech startups instead choose to list on Nasdaq or other exchanges, or end up finding private financing before being bought by multinational corporations.

However, Jefferies — which joined the TASE board in June, and led the exchange’s initial public offering (IPO) in August for 710 million shekels ($205 million USD) — could change that. Jefferies will help underwrite IPOs for Israel’s tech firms, and help them become more beneficial to the country as a whole. Anat Guetta, head of Israel’s securities authority, said she hopes this will strengthen the market.

“We are at a tipping point,” Guetta said, according to Reuters. “We have a new foreign underwriter. ... The mission of Jefferies is to lead IPOs of Israeli high-tech companies into Tel Aviv.”

Israel is becoming a breeding ground for high-tech companies. Facebook announced earlier this year that it would start a new ‘Playground’ for tech innovators, introducing things like workshop spaces, meeting rooms and media production studios — with the hope of bridging the gaps for those looking to work in the industry, and with others internationally. Facebook COO Sheryl Sandberg said Israel was “second only to Silicon Valley” for its companies working in high-tech fields.

In recent months, the country saw a new digital bank open, as well as corporate team-ups to offer new payment solutions.

However, Guetta said the country was in a precarious position, due to the difference between the tech sector’s prominence as a growth driver in the country and the comparative few benefits that the public enjoys from that fact. She noted that tech companies had not been investing much in Israel, with firms investing only 0.16 percent of their portfolios locally — compared to 4 percent or 5 percent from foreign institutions.

“Our capital market is cut off from the success of high-tech,” Guetta said, adding that many deals in the country were “a loss,” and that the economy was “losing value over time.” She noted that Israeli institutions typically invested more in financial and real estate firms.

Earlier this year, Natti Ginor, head of Jefferies’ Israel investment banking, said the company was glad to be doing the work.

“Our company has been doing business in Israel for 20 years,” Ginor said. “And we are looking forward to helping the continued growth of TASE and the companies listed on it.”

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