Author

ARX Advisory Team

Date

December 21, 2022

Annual 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.