TASE has no Arab-owned companies, and asks itself why
Tel Aviv Stock Exchange Chief Executive Ester Levanon said the lack of Arab publicly traded companies was a huge miss for the country and the time has come to fix this injustice.
Arabs make up about 20% of the country's citizens, produce about 8% of GDP - and are behind not a single company on the Tel Aviv Stock Exchange.
"When attorney Tarek Bashir came and asked me why there's not a single Arab company on the stock exchange, all I could say was 'oops,'" said TASE Chief Executive Ester Levanon. "I didn't have a more intelligent answer. Indeed, we neglected that matter, and the time has come to fix the injustice."
Levanon was speaking Thursday at a special TASE seminar on the issue. Bashir is a manager at the Center for Jewish-Arab Economic Development, which took part in the seminar. The Industry and Trade Ministry also participated.
Levanon said the lack of Arab publicly traded companies was a huge miss for the country.
About a decade ago there were two Arab-owned companies on the exchange, Boulos and Kadmani, but both were delisted due to internal problems.
Levanon said this had nothing to do with the owners being Arab; it happens to dozens of companies every year. But no other Arab-owned companies have taken their place.
These companies' failures were mentioned as an obstacle, but the main reason is probably the mindset in the Arab community.
Basher Abdelrazaq, one of the owners of the Golden Crown Hotel in Nazareth, said the main obstacle was Arab business owners' failure to believe they would ever be large enough to raise money on the stock exchange.
Most Arab businesses are family-owned, are in food or real estate, and have annual turnover of less than NIS 20 million, he said. This is too low for them to be traded on the TASE.
"The potential is there but there's a psychological barrier," said Abdelrazaq. "The Arab community doesn't try to enter new fields such as industry. People have low expectations. They don't ever expect to be more than a medium-sized company, and they don't have the nerve to aspire to this."
But there are also financing barriers.
"Banks are currently the only source of financing for Arab-owned businesses," he said. "But the financial system doesn't treat Arab businesses equally. Banks consider the sector to be very risky, so they demand more collateral or interest than they would from a Jewish-owned business. There's no reason for this. All I ask is that I be treated equally."
He praised the government ministries, which he said were trying to help. He has already received a grant from the Industry and Trade Ministry's chief scientist to set up a generic-drug factory in Nazareth, he said.