Tel Aviv stock exchange.
(photo credit: REUTERS)
The Tel Aviv Stock Exchange and Nasdaq, the world’s second-largest stock exchange, announced a joint venture Tuesday to build a private market for Israeli companies that are not yet “ripe” enough to go public.
The Tel Aviv-based joint venture, which will have management selected by both exchanges, will offer “strategic counseling and mentoring, exclusive networking, a secondary market for liquidity events and debt financing services,” according to a press release.
“The cooperation with Nasdaq is great news for the Tel Aviv Stock Exchange and the Israeli economy,” said TASE CEO Yossi Beinart. “For the first time we can offer Israeli companies a real solution to challenges in their growth and give them a real alternative to an exit, so that they will continue to operate as independent companies with significant operations in Israel.”
In addition to the joint venture, further details of which will be released in the next six months, TASE will begin using Nasdaq’s Genium INET technology in its trading platform, which allows trading across a variety of asset classes in accordance with international standards. The technology, according to the New York-based Nasdaq, operates in more than 100 markets around the world.
“By leveraging our world-renowned Genium INET platform, TASE will have limitless opportunity to expand their product and business offerings to the domestic and international markets,” said Sandy Frucher, vice chairman, Nasdaq.
The venture is meant to address a woe regularly cited by the TASE as a sore spot for Israeli companies: a lack of funding options when they’re growing from start-up to fullfledged enterprise.
“What happens in Israel is one of two things. Either companies get sold early, because they can’t do anything at that point, or they find a market, and the market they find is potentially the [London Stock Exchange’s] AIM and... question mark. And this is where we come in. It’s very possible [companies are] being sold too early because they can’t do the natural thing of growing up themselves, and this is who I’m trying to cater to,” Beinart told The Jerusalem Post when he began his role.
The cooperation with Nasdaq seems a natural fit; after the United States, Israel has more companies listed on the tech-heavy exchange than any other country in the world.