A study by the Tel Aviv Stock Exchange (TASE), published yesterday, confirms claims by sources in the capital market that over-regulation is driving away investors, according to the Association of Publicly Traded Companies in Israel. The study found that 100 companies have delisted from the TASE in the past two years and not even one company has listed for trading.
Association of Publicly Traded Companies president Ilan Flato said, "The current situation cannot continue. Someone in the Israeli government must take responsibility and turn the wheel back. Jerusalem should realize that the Israeli capital market is a political stick to beat tycoons just to make headlines, but an essential growth engine for the Israeli economy."
Flato added, "The real number is 130 public companies delisted from the peak in 2008 - 20% of all listed companies." He attributes the delisting to negative incentives from the regulator.
"The TASE's analysis was based on a less important figure," said Flato. "The main problem today is the lack of secondary offerings. Not even one shekel has been raised on the TASE for investment and growth in the past 18 months. There must be real deregulation of the capital market.
"To be a public company today is insane. A regulatory structure has been created in which there is no incentive to go public. The Israel Securities Authority, the Ministry of Justice, and the Ministry of Finance's Capital Markets, Insurance and Savings Department are destroying one of the important tools for encouraging modern economic growth."
Yesterday, the TASE published a study on voluntary delistings in 2010-12, which found that 64 companies delisted voluntarily, and 36 companies were delisted after failing to meet restricted trading rules, or were liquidated.
The study said, "The global economic slowdown, which affected Israel, caused by the market failures that were discovered in the 2008 crisis, increased regulation on companies and investment institutions. In addition, there is expectation in Israel that the recommendations of the Committee on Concentration in the Economy, which the government approved in April 2012, will be implemented."
Published by Globes [online], Israel business news - www.globes-online.com - on April 9, 2013
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