There are multiple stock markets around the world which are constantly looking to attract early stage Israeli companies such as London's Alternative Investment Market (AIM) and Australian Securities Exchange (ASX). However, the latest to recognize Israeli potential is the Frankfurt Stock Exchange, hoping to see Israeli tech offerings in Germany in the nearest future.
At a virtual conference which took place last week, Israeli companies were informed about options for offerings on the relatively new Scale segment of the Frankfurt Stock Exchange, where reduced regulatory requirements make a listing more suitable for smaller growth companies, compared with the main listing.
The webinar was held by the Frankfurt Stock Exchange owner Deutsche Borse in cooperation with Israel's Pearl Cohen law firm and public offering consultant Ruth Palmon.
Frankfurt Stock Exchange VP pre-IPO and capital markets Nathalie Richert presented to the conference the advantages of listing in Germany. Among other things, she stressed that the investor base is broad and there is access to financing for continued growth.
According to the presentation, the Frankfurt Stock Exchange is, "Number one for IPOs by small and medium sized enterprises," and as proof statistics were provided that might be somewhat surprising: The percentage of technology companies on the Frankfurt Stock Exchange is 18% compared with 11% on Nasdaq, and just 8% on the London Stock Exchange.
About 34% of the technology companies traded in Frankfurt have a market cap of at least $100 million, which is usually the value of relatively early stage companies that are not yet looking at a Wall Street IPO. The presentation also stated that the average returns on technology shares that held an offering in recent years in Frankfurt is 82%, and the returns are even higher for companies that held their offering in 2012 and have since yielded returns of 587%.
Anna Moshe, a Senior Partner at Pearl Cohen law firm mentioned: “The capital market is currently very hot and is already eagerly anticipating interesting new companies. The German stock exchange is delighted that interest among German investors has been aroused in Israeli companies and is waiting for the first technology company to list for trading.”
Ruth Palmon, IPO consultant said: “An Israeli company seeking to issue itself in world markets should carefully select the appropriate stock exchange according to its target markets, investor preferences and local regulatory guidelines. We are proud to be the first to expose the Frankfurt Stock Exchange to young Israeli companies seeking capital and international legitimacy. We will be happy to accompany the first Israeli company to be issued on the Frankfurt Stock Exchange.”