ARXAnnual Report (2022): Israeli companies on the TSX and TSX-V
Report highlights the increase in Israeli companies listing on TMX exchanges as an alternative to private funding, alongside the need for better pre-listing strategy and after-market support in order to build demand in Canadian markets.
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Key Insights:
- Israeli companies are increasingly opting to go public on TMX exchanges with 2022 representing an increase of 50% in listings. Moreover, in 2022, we saw Israeli companies begin to graduate from the TSX-V, to the TSX, a testament to their maturity within this market. Of the current Israeli listed companies 77.8% are listed on the TSX-V and 22.2% are on the TSX.
- Approximately ~66% of the Israeli companies listed are either technology or life science companies. While Israeli companies as a whole only represent 0.82% of global listings, Israeli technology companies represent approximately 4.8% of all technology listings.
- These companies, by in large, hold low valuations (in general and in comparison to TMX global averages) and thus see this as an alternative to private funding when they are not mature or high-valued enough to go to other foreign exchanges like NASDAQ and NYSE where Israeli technology companies have historically opted to go public.
- Despite this impressive progress, Israeli companies have overall underperformed the TMX exchanges. We believe this is due to lack of pre and post listing market support and foundational corporate strategy when it comes to building demand and familiarity within the Canadian investor community.
- We believe that in order to overcome this challenge, Israeli companies that are listed or plan to list should invest in advanced investor communications and data-driven analysis tools in order to better connect with Canadian investors and build a foundational business narrative that resonated with them. This will become increasingly important in the coming years as more Israeli companies turn to the Canadian markets.
We may have direct or indirect relationships with some of the companies mentioned. We were not paid for this report however we may have received compensation from some of the companies listed for other services in the past, present, or future. This report does not constitute financial advice, nor should it be perceived that way. Investors are advised to do their own research. This report may include mistakes. We are not liable for any mistakes made or for any decisions that may be made based off them or any other data or insights presented. There are several factors that may contribute to errors in the data presented or in the conclusions reached. Among them: (a) Issues with data source including wrong data or limited data (b) The fact that there are a limited number of listed companies in the data set which may cause unjustified conclusions or over/under representation of certain facts or events. The size in and of itself mandates that the report and any conclusions in it be taken with a grain of salt. (c) Limited knowledge of specific company events that may have caused certain fluctuations in the data. (d) The lack of data regarding companies that previously listed and have since been delisted. (e) And many others. All information presented in this report is based on publicly available information alongside analysis done by ARX staff members. We used a diverse range of data sources. Among them are: (a) Yahoo Finance Data (stock performance), (b) Google Finance Data (stock performance), (c) TMX Site Data (regarding TSX-V and TSX listings, listing types, current Israeli companies listed, sectors, sub-sectors and more) (d) others. It should also be noted that we believe that certain parts of the data we used may have only been accurate as of November which may cause slight inaccuracies. The period analyzed in this report is the period of 01/12/2021 – 01/12/2022. However, some of the companies mentioned were only listed this year and are marked by two stars (**). For these companies, we included only data from ~1 month post listing to avoid inclusion of initial volatility of listing period which is natural and in order to allow the report to focus on regular trading period data for each company. This does, however, mean that the data set it even more limited than it already is and that should be heavily considered when reading the report. We are not associated or affiliated with the TMX Group nor is this report. We do not represent them nor does this report seek to display their thoughts or views.
