September 3, 2018 / 10:36 AM / 3 months ago

UPDATE 1-Tel Aviv Stock Exchange targets retail investors with 2018 IPO -CEO

(Adds details, CEO comments)

By Steven Scheer

TEL AVIV, Sept 3 (Reuters) - The Tel Aviv Stock Exchange (TASE) will hold an initial public offering of nearly one-third of its shares as early as November, TASE Chief Executive Itai Ben Zeev said on Monday, citing the need to bolster the public’s participation in the economy.

Ben Zeev told a news conference that the Israeli exchange seeks to sell at least 31.7 million shares, or 31.7 percent of its equity, in November or December in an issue that will only be open to Israeli retail investors.

“We want the Israeli public to be much more involved and to have a deeper understanding of finance, the stock exchange and the economy,” Ben Zeev later told Reuters. “People ... don’t understand basic concepts of how to manage their money.”

He noted that just 5 five percent of activity on the stock market comes from retail investors, an amount which he aims to double or triple over time.

A prospectus for the offering will be filed sometime this month and the amount of shares offered for sale could be higher depending on whether current TASE shareholders — local and foreign banks — opt to sell more of their holdings, Ben Zeev said.

TASE, with 456 traded companies at a market value of $201 billion, has been struggling with declining trading volumes. It demutualised last September, becoming a for-profit bourse and offering to buy out its shareholders.

Last month, the newly privatised TASE won approval from Israel’s securities regulator for a deal to sell nearly 20 percent of the exchange to investment fund Manikay Partners and another 19 percent to four other foreign investors.

That sale, which was announced in April, valued the exchange at 551 million shekels ($153 million). Ben Zeev said he hoped the IPO would carry a higher valuation.

Participation in the offering will be open to individuals with a private Israeli bank account, through brokers and the TASE’s website and mobile app.

Ben Zeev said a low minimum share purchase would be set but the maximum value of shares an individual could buy would only be known after all bids are received. “It could be 5,000 shekels or 20,000 shekels,” he said.

After the offering, Manikay will hold 19.99 percent, current TASE members will retain up to 22.3 percent, and four other foreign funds - Sunsuper PTY Ltd, Moelis Australia Asset Management Ltd, Dalton Investments LLC and Novo Nordisk Foundation — will own 4.99 percent each. Employees will have a 6 percent stake.

The TASE earned 14 million shekels in 2017 after a one-time accounting charge.

$1 = 3.6110 shekels Reporting by Steven Scheer; Editing by Tova Cohen and Kirsten Donovan

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