Israeli companies explore listing options in Hong Kong, says PwC

Tel Aviv exchange has more than 500 listed companies while 78 Israeli firms are listed on US stock markets, with market capitalisations of between US$100m and US$30b

PUBLISHED : Monday, 22 May, 2017, 12:58pm
UPDATED : Monday, 22 May, 2017, 10:50pm

Israeli technology and health care companies are eyeing stock market listings in Hong Kong in a bid to establish closer ties with Chinese investors and customers, according to accounting giant PricewaterhouseCoopers.

The firm’s Israel partner Eitan Glazer has just led a delegation of companies to Hong Kong to meet with senior stock exchange officials and investors.

“There are an increasing number of Chinese investors in Israeli companies in the past five years. This has led many companies from Israel to show an interest in listing in Hong Kong. This will allow them to get closer to Chinese consumers and investors,” Glazer told the Post in an interview.

Glazer said either the stock exchange’s main board or the proposed Third Board would be attractive to Israeli companies.

To be eligible for a main board listing, companies must demonstrate a HK$50 million (US$ 6.42 million) cumulative profit in the three years leading up to a listing, and a profit of at least HK$20 million in the year prior.

The proposed Third Board will feature lower entry requirements designed to support start-ups, technology firms and overseas companies.

Micki Shapira, partner of law firm Weinstock Zecler, said at least one Israeli firm is actively applying for a listing in Hong Kong.

Glazer said Israel has many innovative technology companies that would appeal to Chinese investors seeking exposure to new technology.

In terms of sectors, he said Israeli technology and health care companies were among the most outward-looking.

Israel’s stock market, the Tel Aviv Stock Exchange, has more than 500 listed companies. Meanwhile, 78 Israeli companies are listed on US stock markets, with market capitalisations ranging from US$100 million to more than US$30 billion.

Glazer said Israeli companies view a Hong Kong listing as helping to develop important synergies with consumers and business partners in Asia.

“Many of the already-listed companies, whether they be in the US or on the Tel Aviv Stock Exchange, have large exposure to the Chinese market, either through their shareholders or customers and business partners, and this is one of the reason why they are considering listing in Hong Kong,” he said.

Investing in Israeli companies is relatively new for Chinese investors according to data from Thomson Reuters. From a low base, investment flows began to pick up in 2014, rising to US$2 billion in 2015, and US$16.5 billion in 2016.

Two years ago PwC appointed senior manager Ram Maskalchi, based in Hong Kong, to lead a team to serve Israeli clients.

“I serve Hong Kong clients and also help Israeli companies to get connected and explore opportunities in this part of the world,” Maskalchi said. “As more and more Israeli companies choose the Hong Kong market for listing, naturally we will have more resources to support this.”