Securities chairman: Israeli companies 'exits' cost state up to 3 times their value

Losses refer to benefits state might have accrued if same company had chosen to go public on Tel Aviv Stock Exchange.

By
December 11, 2013 19:53
1 minute read.
Tel Aviv Stock Exchange

Tel Aviv Stock Exchange TASE 311 (R). (photo credit: Gil Cohen Magen / Reuters)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

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.

Be the first to know - Join our Facebook page.


Although 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.

“There is 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 deregulating others.

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.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS