TASE Chairman Beinart: Israel Should Reduce Exits

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Yossi Beinart feels that quick exits by new companies are hurting Israel’s future.

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Israel has become an “exit nation”, where the goal of its startups is to be bought out by foreign companies. This according to the Tel Aviv Stock Exchange’s chairman Yossi Beinart.

In an exclusive interview with the Jerusalem Post, Beinart said that Israel should work to make going public there a better option for its new companies. He also decried the practice of startups holding their IPOs on foreign stock exchanges.

“It’s very possible they’re 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.

According to a report released last year by the Israel Securities Authority, 95 percent of Israeli start-ups prefer an exit over local initial public offerings. Such exits mean that an already established company simply absorbs the new one and, as a result, Israel does not develop the next Microsoft or new home grown major corporations such as Teva.

Beinart was appointed to his job last summer after the TASE’s chairman Sam Bronfeld and its CEO, Ester Levanon, were forced out by ISA chairman Shmuel Hauser who blamed the two for failing to promote the Israeli exchange among new Israeli companies.

In the Post interview, Beinart discussed his vision for the future of TASE. “The vision in some way has to include an analysis of what it takes to grow a regional, or in our case, a country exchange. If you look at exchanges worldwide, a lot of the small ones are struggling.”

“What happens in Israel is one of two things. Either companies can 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]. And this is where we come in.”

Just last month Beinart announced a new plan to boost trading on the TASE. The plan called for the hiring of sales people who will work at attracting new company flotations and to allow for the trading in companies not officially listed on the exchange. He wants the TASE to offer options to small Israeli companies that are not yet large enough to offer IPOs abroad so they will not simply sell out to a foreign firm.

The advantage in TASE, even for companies large enough to get listed on the NASDAQ, according to Beinart, is that in Israel they would not be considered a small investment and can find the investors needed to continue to grow.

Mr. Beinart also feels that the TASE should specialize in helping the type of companies that Israel has come to be known for, such as high tech. “Israel is known for biotech and tech, so we should concentrate on helping companies in this sphere list here.”

It is Beinart’s ambition to bring in 100 new companies to TASE over the next five years and to bring its daily trading volume up to 2.5 billion Shekels ($690 million). He will do this, in part, by offering small and medium-sized companies a package of services such as analysis, investor relations and road shows.

The TASE chair is also planning on offering companies that it does not actually list the opportunity to be traded in some form there. Beinart pointed out that abroad the listing, trading and clearing of companies do not necessarily need to be done all at the same exchange. To that end, yesterday a deal between TASE and the German Deutsche Boerse’s Eurex went into effect in which the latter will list and clear futures based on the TA-25 Index.

Yossi Beinart previously served as the CEO of both Nadex and Shiel IP Inc. He graduated from the Hebrew University in Jerusalem with a Bsc in computer science in 1986 and was the longtime president and CEO of the North American Derivatives Exchange (NADEX). He took over as the TASE CEO in January of this year after its long serving former CEO Ester Levanon stepped down.