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Tel Aviv Stock Exchange (TASE) CEO Esther Levanon is well aware of the fall in popularity of the TASE. "I am concerned about the situation. We are trying to find solutions in many different ways," she told "Globes".
However, Levanon emphasizes that lower turnover is a problem in markets all over the world. "According to International Federation of Stock Exchanges statistics, markets throughout the world, except for the Far East, have experienced dramatic falls in turnover. We are not exceptional in this respect."
"Globes": What does this trend stem from?
Levanon: "The crisis in Europe and the problems in the US market have caused capital to be withdrawn from Europe and the US, and invested in the East. The bottom line is that international turnover is almost unchanged, but whereas turnover in Europe has rebounded since the beginning of the year, in Tel Aviv it has remained low.
"Another fact that has influenced turnover is foreign investors. They have reduced their activity as a result of the geopolitical situation that began with the Arab Spring. In addition, the seemingly positive upgrade of Israel from the MSCI list of emerging markets to the list of developed markets has actually had a negative effect. Israel plays a small part in the new indexes, and it turns out that there's a connection between the indexes' composition and foreigners' activities. We are no longer their focus. We have fallen between the cracks because we are no longer an emerging market, but in comparison with developed markets, we are too small and are not included in the indexes that foreign investors work with."
What about the tighter regulations?
"Excessive regulation of investment advisers in banks and institutions is not helping. This influences foreign investors, since not only are they not initiating investments in Israel, the brokers themselves are refraining from investing due to the regulations."
How then can foreign investors be persuaded to invest in Israel?
"If we find oil here and there is peace in the Middle East, they will certainly come back. Since I don't know how to do either of those two things, we have turned towards other initiatives.
"For example, we started a project with "Bloomberg", and in my opinion it is one of the most important steps that have been taken, since we have no marketing agents and our resources are limited," Levanon says. "The project has three layers: the publication of TASE trading data on the "Bloomberg" TV channel; interviews on the "Bloomberg" channel with key Israeli economic figures; and monthly interviews with CEOs of public Israeli companies by "Bloomberg" journalists. These steps increase awareness of the Israeli market overseas, and foreign TASE members have already noted that this is having a positive effect."
Are additional non-marketing steps being planned to improve the situation?
"We are examining the building of new devices for the derivatives market. They might not increase liquidity, but they can certainly prevent the continued fall in turnover. I hope that these new devices will affect the stock market just as exchange traded funds (ETF) on the Tel Bond indexes affected the corporate bond market. In addition, we have begun a round of talks with market officials, and I am open to hearing all suggestions."
What about benefits to companies that are listed overseas and want to list on the TASE?
"I cannot force a company to be listed on the TASE, and I cannot give it more benefits than I give to Israeli companies that are dual-listed."
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