New TASE Chief Aims to Increase Trading Volume, Attract New Firms

Yossi Beinart’s five-year plan: 100 new listings, daily trading volume 
of $725 million; ‘we have to go out and look for business,’ he says

Reuters

“Being CEO of the Tel Aviv Stock Exchange is my dream job,” the recently appointed head of the TASE, Yossi Beinart, said at a news conference on Tuesday.

Beinart, who took the reins in January, hopes to reverse the sharp downturn in the fortunes of the TASE, which cost the jobs of two top executives last year, with a new plan to boost trading volumes.

Beinart said he would work to add another 100 companies to TASE in the next five years and generate volume of 2.5 billion shekels ($725 million) a day. He said his chief goal was to cater to small- and medium-sized companies, and offer them a package of services such as analysis, investor relations and road shows. Beinart said the competition among the world’s stock markets is fierce, and the TASE will have to fight for every issue.

He said he planned to hire sales people to help attract new company flotations and also aimed to allow trading of companies not listed on the exchange.

Beinart, a former president and CEO of the North American Derivatives Exchange took the reins at the TASE in January after longtime CEO Ester Levanon stepped down along with chairman Saul Bronfeld after criticism for not doing enough to boost trading volumes, among other things.

Bronfeld was replaced by Amnon Neubach in March.

Beinart said the recruitment of sales staff was part of a more active attempt to promote TASE’s services, needed because of the tendency of many technology-oriented Israeli companies to list their shares on the U.S. Nasdaq exchange.

“We never went out to sell, we just waited for them [companies] to come ... We have to be proactive and not be a utility,” Beinart told Reuters after the news conference.

“We have to go out and look for business,” he said, adding he would like to create a welcoming environment for biotech companies in particular just as the Toronto bourse is a haven for energy firms.

Beinart faces a challenge to revive activity on the bourse, given its number of listed companies has dropped to 485 from 654 in 2007, while average daily trading volume has fallen sharply the past two years.

Volume over the first four months of 2014 recovered somewhat to nearly 1.3 billion shekels worth of shares a day from 1.1 billion in 2012, but remains well below a daily average of more than 2 billion in 2010.

Neubach and Beinart said a plan by the securities authority to turn the TASE, owned by banks and other members, into a for-profit exchange was moving forward.

“All of them understand something has to be done,” Neubach said. “When and how is too soon to say. But we hope (it will be done) between a year and a year and a half.” Beinart arrived with well organized plans and a vision, said Neubach.

Beinart also said the bourse was working on increasing the number of entities which could be traded on the bourse, including companies listed on other exchanges, such as Israel stocks listed in the United States.

He said the world of trading was no longer as simple as in the past since regulation has changed because of the financial crisis, companies can raise money anywhere around the globe and Israelis can now invest their money overseas.

As to the scheduled move to its newly completed building, Beinart said an evaluation will be completed within 10 days, and if the cost of moving is judged to be to great the TASE will stay put. “At the end of the day, the issue of our revenues is more worrying than our expenses. In my opinion, the local stock exchange is very efficient. “

On the issue of regulation, which has grown since the global financial crisis began in 2008, Beinart said there needed to be some easing in reporting requirements, but argued that regulation was not as strict as some companies made it out to be.

“It may be a public relations problem,” he said.