Click here to close now.




















Welcome!

News Feed Item

Israel's Economic Progress Threatened by Tactical and Structural -- and Solvable -- Liquidity Shortages, According to New Milken Institute Report

LOS ANGELES, CA -- (Marketwired) -- 03/18/14 -- In 2010, Israel graduated to developed country status in world stock indexes, a move that should have opened its markets to a large pool of global investors. Instead, there has been a decrease in foreign portfolio investment and an increase in local portfolio outflows. Israel's capital markets have suffered a decline in liquidity that threatens the country's economic security and growth. From 2008 to 2012, the average daily trading volume on the Tel-Aviv Stock Exchange (TASE) has dropped more than 50 percent, from NIS 2 billion to around NIS 800 million. TASE liquidity ranks a low 30th among exchange turnover ratios in international securities exchanges. This is according to a new report from the Milken Institute, "(Re)inventing Israel's Capital Markets: Financing the Transition from Startup Nation to Global Nation."

Also according to the report, the Israeli IPO market has collapsed, mostly due to high regulatory costs in the NASDAQ and TASE, leading to 95 percent of startups being sold to foreign entities. These conditions, a result of the failure to attract and retain portfolio investors from outside Israel and overconcentration on early-stage financing, put at risk the future of local capital investment and overall economic growth. The lack of late-stage financing, along with human capital constraints, is leading startups to premature exits through mergers and acquisitions. Knowledge-based firms and their exports, the heart of Israel's competitive advantage, require a longer financial runway for takeoff in transitioning into global companies.

"Without liquidity, Israel will not be able to transition from a startup to a scale-up nation or become a leader in new technologies whose global contributions also reap domestic rewards," observed Milken Institute Senior Fellow Glenn Yago. "While known for their R&D, Israel's startups have not been as successful commercializing the products and discoveries that would build more businesses, new sectors and secondary markets, and gain for Israel a greater share of the product value chain."

"(Re)inventing Israel's Capital Markets" comprises the discussions in a Financial Innovations Lab® -- a gathering of senior leaders in Israel's public and private sectors along with representatives of financial institutions and regulators -- convened by the Milken Institute in Los Angeles in May 2013. Participants explored ways to improve access to capital with an eye toward securing Israel's future as an innovation hub.

Lab participants came up with concrete solutions that Israel can enact now to reverse its liquidity crisis:

  • Increase transparency and accessibility to foreign investors, in part by creating new financial products, such as exchange traded funds and global benchmarks.
  • Remove regulatory, institutional, legal, tax, and market infrastructure requirements that impede the establishment of a financial services landscape supportive of new technologies, and modernize regulations for IPOs to lower transaction costs of public offerings.
  • Develop fixed-income products that support economic expansion in Israel's regions and new technologies.
  • Expand private equity through public markets with venture trusts and business development corporations for under-financed firms; and, especially, create late-stage technology venture funds.
  • Build a "technology bridge" to institutional investors for pre-IPO companies by bringing them into an institutional investor asset class, such as a non-exchange-traded, private-shares market.
  • Rebrand and re-launch the Tel-Aviv Stock Exchange as the Global Technology Securities Exchange through new financial products for global partnerships that solve challenges through technology applications in the emerging and frontier markets.

"The technology bridge we discussed in the Lab would give the most promising companies access to a global community of asset managers and to additional capital, beyond the traditional venture capital and private equity markets," Yago added. "These young companies would benefit from a longer runway before launching an IPO or being forced into an early merger or acquisition -- a move that most often ushers IP out of the country that funded its development."

The Lab concluded that the time has come to "reinvent" Israel's capital markets. Israel needs to put the mechanisms in place to finance the expansion of its high-tech companies and disruptive technologies so that they can become self-sustaining. Their success in commercializing technologies and products for export will strengthen economic security -- and will enable Israel to serve as a model for other countries seeking to emulate its rise as the first startup nation.

"To build a global nation, it is not enough to incubate startups. Companies must be able to 'scale up' as well," said Yago. "Without solving its capital gap, Israel's technological mojo will emigrate, undermining the base that could sustain a highly productive, high-employment society."

About the Milken Institute
A nonprofit, nonpartisan think tank, the Milken Institute believes in the power of capital markets to solve urgent social and economic challenges. Its mission is to improve lives around the world by advancing innovative economic and policy solutions that create jobs, widen access to capital and enhance health.

About Financial Innovations Labs®
Financial Innovations Labs® bring together researchers, policy makers, and business, financial, and professional practitioners to create market-based solutions to business and public policy challenges. Using real and simulated case studies, participants consider and design alternative capital structures and then apply appropriate financial technologies to them.

www.milkeninstitute.org
@milkeninstitute

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Cloud and datacenter migration innovator AppZero has joined the Microsoft Enterprise Cloud Alliance Program. AppZero is a fast, flexible way to move Windows Server applications from any source machine – physical or virtual – to any destination server, in any cloud or datacenter, using its patented container technology. AppZero’s container is also called a Virtual Application Appliance (VAA). To facilitate Microsoft Azure onboarding, AppZero has two purpose-built offerings: AppZero SP for Azure,...
WSM International, the pioneer and leader in server migration services, has announced an agreement with WHOA.com, a leader in providing secure public, private and hybrid cloud computing services. Under terms of the agreement, WSM will provide migration services to WHOA.com customers to relocate some or all of their applications, digital assets, and other computing workloads to WHOA.com enterprise-class, secure cloud infrastructure. The migration services include detailed evaluation and planning...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Trel...
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of tech...
Everyone talks about continuous integration and continuous delivery but those are just two ends of the pipeline. In the middle of DevOps is continuous testing (CT), and many organizations are struggling to implement continuous testing effectively. After all, without continuous testing there is no delivery. And Lab-As-A-Service (LaaS) enhances the CT with dynamic on-demand self-serve test topologies. CT together with LAAS make a powerful combination that perfectly serves complex software developm...
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...