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Going Public Abroad 2008
The Tel-Aviv Stock Exchange – The Home Market For Israeli Companies
Ronit Harel Ben-Ze'ev, Senior Vice President
April 2008
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612505
326223
147805164
1150
100
200
300
400
500
600
700
00 01 02 03 04 05 06 07 1-3/08
0
50
100
150
200
250
300
350
The Equity Market - Prices and Volumes(2000 – 2008) US $ terms
Daily Trading Volume (US $ millions) TA-25 Index
Peak on Dec. 07 1,480
TA-25 Index
Shares – 0.6 $ billion (0.5 $ billion in 2007)Bonds – 1.1 $ billion (0.8 $ billion in 2007)
Daily Volume
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The Equity Market– IPO's(2003-2007)
56 new companies raised 2.5 $ billion
0.03
0.40.5
0.8
2.5
0
0.5
1
1.5
2
2.5
3
2003 2004 2005 2006 2007*
US $ billions
Amount raised
20 IPO's
24 IPO's (7 hi-tech)
37 IPO's
(17 hi-tech)
2 IPO's
56 IPO's (20 hi-tech)
*Including 1.5 $ billion from privatizing Oil Refineries
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Fixed Income Market – Capital Raised (2001-2007)
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007
Public
Institutionals
US $ billions
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0
500
1,000
1,500
2,000
2,500
3,000
TASE US LONDON
2004-2005-2006-2007No. of IPO
20
24
37
46
10
4
20
15
56
5
4
IPO of Israeli companies (2004-2007)
$millionsTotal: 137 companie
s
Total:25 companies
Total: 43companies
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The Home Market – 2 Alternatives
• IPO on the TASE
• Dual Listing on the TASE – After the IPO on U.S. Markets or LSE (official list)
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IPO on the TASE
• A spring board to offering abroad
• Timing – raise when you can (exiting in stages)
• Low costs and a quick process
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IPO Costs(1) ($k)
US UK ISRAEL
Fixed costs (2) 1,475 1,365 155
Variable costs: Underwriting, distribution
3,500 2,500 2,500
Total 4,975 3,865 2,655
(1) $ 50 mil offering(2) Lawyers, CPA, printing, fees, PR, etc.
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Annual Costs ($k)
US(1) UK(1) ISRAEL
General costs (2) 1,800 822 260
D&O insurance 250 50-60 20
Class actions (estimate)
250 -- --
Total 2,300 ~ ~900 280
(1) Source: canaccordAsams, June, 2006(2) Lawyers, CPA, IR, PR, fees, shareholders meetings, payments and options for directors
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• A spring board to offering abroad
• Timing – raise when you can (exiting in stages)
• Low costs and a quick process
• Special rules for R&D companies
IPO on the TASE
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Special rules for R&D companies*
• Post-IPO equity: At least NIS 8 million
• Minimal distribution of public float: 35 shareholders
• Public float:
The public float (percent) must be at least
When the value of the public float is…
10.0 From 16
7.5 From 50
* R&D company: one that has invested at least NIS 3 million in R&D in the last three years, including money from the Chief Scientist.
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Listing Procedures (excluding R&D companies)
Procedure 1 Procedure 2 Procedure 3
Shareholders' equity after listing
25 35 --
Public-float value 20 30 80
Period of activity 12 months 12 months --
Added value in the 12 months preceding listing
4 -- --
Value of issue -- -- 80
Value of the company's shares
-- -- 200
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• A spring board to offering abroad
• Timing – raise when you can (exiting in stages)
• Low costs and a quick process
• Special rules for R&D companies
• TASE indices
IPO on the TASE
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Index Description Cap. B$
TA-25 25 highest market cap shares 128
TA-100 100 highest market cap shares 163
Mid-Cap-5050 highest market cap shares non-TASE 100 shares 5
Tel-Tech-15 15 highest market cap Hi-Tech sector shares 10
Finance-15 15 highest market cap finance sector shares 23
Real Estate-15 15 highest market cap real estate sector shares 14
Tel-Div-20 20 TA-100 shares with the highest dividend yields 34
Maala (SRI)20 TA-100 companies shares with the highest rankings by the Maala organization for social responsibility
72
Tel-Bond 20 20 highest market cap non-government bonds 11
Market Indices February 2008
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• A spring board to offering abroad
• Timing – raise when you can (exiting in stages)
• Low costs and a quick process
• Special rules for R&D companies
• TASE indices
• Dual listing law – after listing on U.S and U.K markets
IPO on the TASE
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• 45 Israeli companies have dual listed on the TASE since the
dual listing law was enacted
• 4 companies-Verifone, Partner, Perrigo and Cellcom, are included in
the TA-25 Index
• 11 companies are included in the Tel-Tech 15 Index
• 14 companies are included in the TA-100 index
• 11 additional companies are traded both in Tel Aviv and the
U.S.
Dual Listing
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• More Israeli investors - institutional and individual.
• Index products (TA 25, TA 100, Tel-Tech, Real Estate-15 ect).
• TA-25 companies may benefit from trading in index-options.
• Raising money on TASE.
• The home market benefit
• Blue-chip prominence on the TASE
• Greater familiarity and exposure
• 13-hour continuous trading from 10:00 a.m. to 11:00 p.m., local time
• Options can be exercised by employees easily and at low cost
The Benefits of Dual Listing
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Some More Figures
Market Capitalization
(Millions of Shekels)
February 29, 2008
Portion of TASE Trading Volume
1-2/2008
Average Daily Trading Volume on
TASE –
1-2/2008
(Thousands of Shekels)
Partner 7/2001 12,250 80% 40,321
Perrigo 3/2005 11,544 18% 18,754
Cellcom 7/2007 11,437 59% 35,404
Verifone 11/2006 6,162 13% 17,930
Given Imaging 3/2004 1,681 35% 2,837
Alvarion 7/2001 1,675 32% 4,299
Ampal 8/2006 1,382 64% 1,247
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Thank YouThank You
Nothing contained in this presentation should be construed as investment advice, either on behalf of particular securities or overall investment strategies, and nothing contained in this presentation shall be deemed to constitute an offer, or solicitation of an offer, to buy or sell any securities. While the information contained in this presentation was obtained from sources believed to be accurate and reliable, the TASE does not represent that such information is accurate or complete, and is not responsible for any errors or omissions.