Tel Aviv stock exchange.
(photo credit: REUTERS)
Some 30 percent of the companies publicly traded on the Tel Aviv Stock Exchange wish to delist, the Israel Securities Authority wrote in its annual report Monday, adding that the situation requires further reforms to make local trading attractive.
Some 40 companies quit trading in 2014, according to the report, leaving 469 publicly traded companies, 46 of which have dual listings with foreign stock exchanges. The ISA noted that since 2011, a quarter of the companies that delisted did so because they were acquired, while the others merged or listed elsewhere.
The ISA highlighted the difficulties in the country’s financial markets as a way of pushing forward its regulatory road map, which is intended to ease unnecessary regulations and increase systemic stability. While part of the road map has already taken for of law, many other elements are still in the works or were put on hold due to the change in the government.
“We think we can do much, much more,” said ISA chairman Shmuel Hauser.
“There’s a certain feeling that it’s not worth doing business in Israel, and we have to change it.”
Hauser highlighted the importance of restructuring the stock exchange, reducing the dominance of banks in the financial sector, and making it easier for companies to go public.
One of the major accomplishments the ISA pulled off last year, the report noted, was introducing an online voting system for shareholders. The electronic voting system, according to the ISA’s head of information technology Natan Hershkovitz, is believed to be the first of its kind for a government agency, and unlike private corporations offering similar services for a fee, provides shareholders with greater flexibility and convenience for participating.
In the coming year, it is expected to push for turning the TASE into a for-profit company and open the doors for trading a wider variety of products. Controversially, it is also expected to endorse listing stocks from public companies being traded elsewhere.
“This is essentially involuntary listing, and that causes problems,” noted Hauser.
As a result, it will likely begin with allowing the exchange to trade financial products from very large companies, so as to ensure that local trading will not affect investors.
The authority is also in the process of regulating trading platforms and ratings agencies, and transitioning regulation of ETNs (Exchange Traded Notes) to that of ETFs (Exchange Traded Funds).
In brighter news, the market value of the products listed on the exchange rose to a high of NIS 875 billion, up from NIS 604b. in 2012.