from the February 2008 issue

Israeli firms raise record capital in 2007 offerings

Tel Aviv-listed companies raised a record amount in new issues in 2007 while turmoil from the U.S. housing market had little impact on the Israeli market, Tel Aviv Stock Exchange (TASE) officials said.

It was was one of the best years for the Israeli economy, as demonstrated by rapid growth, the government's fiscal discipline and price stability, Saul Bronfeld, TASE chairman said. "The positive developments in the capital market raised trading volumes and new issues," he said.

TASE is becoming a major non-bank credit alternative as companies raised more than $25 billion this year. This included $5 billion in equities and $21 billion in bonds, up 85 percent and 90 percent, respectively, from 2006.

TASE said 56 companies, including 20 in the high-tech sector, raised about 10.3 billion shekels ($2.64 billion) in initial public offerings on the exchange, compared with 37 companies raising 3.3 billion shekels in 2006.

The amount raised in offerings was significantly boosted by a 6.4 billion shekel offering, the largest ever in the Israeli market, when the government sold its 56 percent stake in Oil Refineries ORL.TA in February.

Key share indexes rose markedly with the Tel Aviv-100 index .TA100 peaking at a new high of 1199.38 points and the TA-25 .TA25 blue chip index reaching a record 1248.80 points.

Trading volumes increased to a daily average of $500 million for equities, up 55 percent from 2006, and $800 million for bonds, more than double the volume in 2006.

The Tel Bond-20 index launched earlier in the year reached a value of $900 million and the stock exchange said it is considering adding a Tel Bond-40 and a Tel Bond-60 index.

While TASE diversified its investments products, adding 150 exchange traded funds to reach a total 240 ETFs, 2007 was also a year of increased globalization for the stock exchange.

"We strive ... to make Israel an integral part of the global market," TASE Chief Executive Ester Levanon said. During the year, TASE signed cooperation agreements with the London Stock Exchange and Nasdaq, and Levanon noted the exchange was working on projects with both exchanges aimed at increasing cooperation.

"We have started the ball rolling for increased cooperation with the LSE and hope to report on new developments shortly," she said.

Reprinted from the Israel High-Tech & Investment Report February 2008

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