The Tel Aviv Stock Exchange has a clear message for the country’s leaders, and it is calling on them to act to strengthen investment in Israel. “The State of Israel, without meaning to, encourages people to take their money and transfer it overseas,” Tel Aviv Stock Exchange CEO Ittai Ben-Zeev told the annual flotations conference of the Association of Publicly Traded Companies. “Will that be good for people here? Absolutely not. Why not embrace the entrepreneurs and investors who live here and support the Israeli economy? Just as a company builds a five-year business plan, why not do that here as well?,” Ben-Zeev said.
“A few years ago, they said that the capital market was a place for the wealthy. There is no citizen in Israel whose pension isn’t here. If we wake up in ten years’ time to find that the money isn’t here, we will turn from a rich country to a poor one. It’s a slippery slope,” Ben-Zeev continued. He added that he hoped that 2024 would be a year of reform. “There’s no shame in doing things and saying we failed, but it’s very important to try.”
In the course of his remarks, Ben-Zeev also conveyed a clear message to the public companies themselves. “We, at the stock exchange, look at the structure of the Israeli capital market, and we all know that we don’t have as many players as we should like, but institutions that manage a great deal of money, but don’t generate enough liquidity and marketability. On other side are the public companies. Many of them don’t report in English or don’t invest in investor relations. They don’t bring more investors who will bring about greater marketability. So beyond what can be done (by the stock exchange itself, R.W.), the public companies must also put an emphasis on how they can generate more liquidity and marketability, because we really are not happy with the existing situation. It’s true that we’re in a better place than in the past, but we’re still a long way from where we’d like to be,” Ben Zeev said.
Ben-Zeev said that the stock exchange had introduced reform that would boost liquidity, since the more liquidity and marketability there is, the cheaper it is to raise capital. “Foreign investors look at liquidity and marketability, and that’s a factor in their decision whether to invest in Israel. Everyone has to understand that the success of the stock exchange, of the companies and of the economy is a growing cake that everyone benefits from.” Ben-Zeev said that the current period represented an opportunity, both because of the security crisis and because of the new appointments of regulators, such as the new chairperson of the Israel Securities Authority, Sefi Zinger.
Association of Publicly Traded Companies CEO Ilan Flato commented on the danger of increasing the defense budget beyond what was required because of the war. “If the framework is exceeded, that will have severe consequences, including in welfare. We could be back to the lost decade, the decade after the Yom Kippur War when the budget was blown out and the rate of growth in the economy was cut in half or more. This is where we have to put the emphasis,” Flato warned.
Published by Globes, Israel business news – en.globes.co.il – on March 4, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
