Israeli Companies Look to Australia
Since its formation in 1987, the Australian Securities Exchange (ASX) is recognised around the globe as a diversified worldwide equity market with a reputation for conducting markets of integrity.
With an average daily turnover of $4.685 billion and market capitalisation of $1.6 trillion, the ASX has been pushing very hard to invite Israeli companies to list on its exchange. The general manager of ASX listings, Max Cunningham says that its focus on Israeli companies is due to “Israel’s reputation for innovation and establishing regional and international business.”
It is apparent that the ASX is just as appealing to Israeli companies. Currently, 15 Israeli companies are listed on the ASX. After Israel-based Mobilicom commenced trading on the ASX in May 2017, CEO and co-founder, Oren Elkayam said that “Israeli tech companies like ours are increasingly viewing Australia as the ideal access point to stock exchange funding.”
So why has Australia been able to attract such a steady stream of Israeli investment seekers over the last few years?
Access to capital
One of the most compelling answers to this question is the fact that a listing on the ASX exposes a company to a much broader network of investors both in Australia and around the globe. Australia’s funds management industry is the largest in the Asia-pacific region due to Australia’s superannuation system. And by 2035, its pool of superannuation assets is expected to reach $9.5 trillion.
High ranking in the world’s top equity markets
The ASX is consistently ranked in the world’s top ten equity markets for capital raising. From 2014 to 2016, the initial public offering capital raised on the ASX was $28,746 million. This figure is an incentive for growth stage companies who are looking to raise capital to fund future growth.
Ideal market size for start-up companies
Small to medium sized Israeli companies are increasingly viewing the ASX as ideal for stock exchange funding because the ASX has traditionally hosted a large number of relatively small and early-stage companies.
The Israeli stock exchange does not provide sufficient access to growth funding and the US exchange is expensive and more suited to larger ventures. Thus, Australia is seen as the perfect market size for startup companies. Israeli companies with market capitalization of as little as $5-10 million are able to list on the ASX.
Stable western economy
Another great attraction of Australia for Israeli companies is Australia’s resilient Western economy and impressive growth record. From 1992 to 2015 Australia’s economy grew by an average rate of 3.3% in real terms (well above that of all major developed economies including the US). Australia’s high and steady economic growth gives foreign companies the confidence and incentive to list.
Shared values and historical connections
Despite being separated by vast distances and multiple time zones, key connections between Israel and Australia can be identified. In the early 1940’s, Australia’s then-foreign minister, Doc Evatt actively pursued Israel’s establishment, making Australia the first country to vote in favour of the creation of Israel in the historic UN vote. Today, both Israel and Australia share a passion for innovation and technology. Both are recognised for their technological advancements, medical breakthroughs, and environmental discoveries.
We have only listed some of the reasons why Israeli companies are looking to Australia for expansion plans but there are a multitude of benefits that come from listing on the ASX. Our team has over 45 years’ experience in advising both national and international clients on their investments in Australia. We offer advice to all types of businesses to help them successfully navigate the laws and regulations that apply to international investment.
If you are thinking of listing on the ASX, please contact a member of our Start-ups and Emerging Enterprises Team