TASE Loses Dual-Listed Companies

YERUSHALAYIM - A number of dual-listed companies have delisted from the Tel Aviv Stock Exchange over the past few years, a trend highlighted by the recent decision of Mellanox Technologies to forego the TASE listing, Globes reports.

Some 64 companies voluntarily delisted in 2010-12, including six companies with an aggregate market cap of NIS 6.5 billion.

Among those who decided that a listing on Wall Street is sufficient for its business needs: networking solutions developer Radware, legacy software modernization solutions developer BluePhoenix Solutions, U.S. payment terminals development VeriFone Holdings and fleet management solutions developer Pointer Telocation Systems.

That leaves over 40 dual-listed companies, including Teva Pharmaceutical Industries, Perrigo Company, mobile carriers Cellcom and Partner Communications.

The TASE is concerned about the trend. Fewer companies means declining trading volumes. Companies stand to gain from increased trading volume in their shares.

But the bolting firms complain of tightened regulations. The class-action suit against Teva forcing it to begin disclosing executive pay worries other dual-listed companies that they may have to follow suit, an incentive to delist.

“The obligations of dual-listed companies under the Securities Law have not greatly increased. The difficulty is created by other laws, such as the Companies Law and insurance and provident fund provisions, which have been tightened in recent years,” says a capital market source.

Some former dual-listed companies say they delisted from the TASE because most of the trading in their shares is not in Israel but abroad.

“Since the Dual Listing Law came into effect, some companies are still with us, and others are not for various reasons,” TASE chairman Sam Bronfeld told Globes. “There is a very wide variability in the proportion of trading on TASE compared with New York. If I am not mistaken, trading volumes in the U.S. are much greater,” he added. “But that does not matter. The idea is to add to the existing U.S. trading volumes by Israeli investors who might not otherwise be investors at timetables which do not overlap.

“In other words, dual-listing has many advantages from the companies’ perspective. It doesn’t mean that half of the turnover should be in Tel Aviv. What’s important, and what we’ve seen over the years, is that dual listing increases trading volumes and liquidity. Trading on the TASE is much cheaper than in New York, and the trading hours are friendlier for Israelis. The advantage is very clear,” he said.