The Minister of Economy and Industry, Orna Barbibai, addressed a letter to Finance Minister Avigdor Lieberman today (Monday), with the aim of establishing a designated stock exchange for small and medium-sized businesses, including start-up companies.
In the letter, the Minister stated that: “The Ministry of Economy is examining options for diversifying funding sources for small and medium-sized businesses. Having launched highly successful credit funds, we are also interested in enabling the raising of shareholder capital from the public through institutional investors, which will make it possible to create a capital structure tailored to the type of business activity and open up expansion and risk management options not previously available. The Minister added that “in addition to the momentum that such a move will give to small and medium-sized businesses, it will increase competition in the capital market, which is known for its centralization.”
The Small and Medium Business Agency in the Ministry of Economy is convinced of the need to promote the expansion of the possibility of raising shareholder capital for small and medium-sized businesses, as part of the refinement of the market and the increase in funding sources. This need exists among growing businesses in the high-tech and biotech fields, but also, and no less important, in the field of traditional businesses.
In 2017, the Securities Authority examined the possibility of establishing a secondary stock exchange for small and medium-sized businesses. Currently, the Minister of Economy and Industry wants to promote the establishment of the stock exchange, but the issue has not completed a full legislative process.
The Small and Medium Business Agency in the Ministry of Economy examined the relevant business pool for small and medium-sized businesses in terms of size of businesses and found that the volume of businesses with a turnover of over NIS 50 million is about 3,000 businesses, with 540 already traded on the stock exchange. About 2,500 businesses.
In light of the above, the Minister of Economy and Industry has approached the Minister of Finance to work in cooperation with the Securities Authority to promote a stock exchange for small and medium-sized businesses that will enable the raising of shareholder capital from the public through institutional bodies.
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