Foreign purchases of Israeli companies, referred to as “exits,” can cost the
state up to three times the value of the exit deal, Israel Securities Authority
chairman Shmuel Hauser said Wednesday.
“In a simulation we did at the
authority, we found that for every $1 of an exit, the state loses far more than
$1, and it can even reach a loss of $3 and more,” he said.
Hauser did not explain the methodology of the simulation, the losses apparently
referred to benefits the state might have accrued if the same company had chosen
instead to go public on the Tel Aviv Stock Exchange. Increasing local IPOs
(initial public offerings) has been a central goal for Hauser.
an important connection between raising capital on the stock exchange and
growth,” he said. Taxes from locally traded stocks boost government revenues.
The financial markets could also provide the government with tools for financing
projects such as housing, he added.
A year ago, the ISA published a road
map for increasing liquidity in the Israeli capital markets, which included
taking steps such as installing new oversight on credit-ratings agencies, while
The first reading of a bill to reduce regulatory
burden passed the Knesset two weeks ago. Hauser outlined initial steps he plans
to take once the law is passed, su ch as reducing regulatory burden on small and
medium-sized business by introducing exemptions in the first half of 2014 and
allowing R&D companies access to the stock exchange.
Changes can also
be expected at the TASE, where both CEO Esther Levanon and chairman Sam Bronfeld
offered their resignations in July.
Incoming CEO Yossi Beinart started
his transition into the role in November.