Israeli investment institutions have been the subject of courting by quite a few foreign companies in recent years, including US real estate and medical companies seeking to raise money on the Tel Aviv Stock Exchange (TASE). Cases of a foreign company listed overseas and not planning to raise money in Israel coming to meeting with investment institutions in Israel, on the other hand, are rarer. Sources inform “Globes” that two large companies are currently in the midst of a roadshow with local investment institutions. Their aim is not to raise money in the short term; the meetings are part of the roadshow they are conducting with investors in Europe.
The companies are Wheaton Precious Metals, listed on the New York and Toronto Stock Exchanges at a market cap of $7.8 billion, and biotechnology giant CSL, listed on the Australian Securities Exchange (ASX) at a market cap of A$83.7 billion ($59 billion). Wheaton completed a series of meeting in Israel, while CSL is scheduled to visit Israel next week for meetings with market concerns. The two companies each separately contacted Gelbart Kahana – Investors Relations, which is advising them in the roadshow being conducted in Israel.
These meetings follow a trend towards increasing the proportion of investment institutions total investment portfolios invested overseas. For example, “Globes” recently reported that 12.5% of all money managed by investment institutions is invested in overseas shares, including investments through exchange-traded funds (ETFs) and share mutual funds. Foreign investment by these institutions totaled NIS 212 billion as of the end of May.
These investments are larger than they were in the past, with more and more money being diverted to overseas investments, as opposed to investments in shares in Israel. The TASE is experiencing relative stagnation – there are relatively few IPOs, while prominent shares are being delisted from trading, after either being listed for trading overseas (e.g. Ituran, Silicom, and Ceragon, where were delisted in recent years) or sold to foreign companies (for example Sodastream, which is due to be delisted in the coming months).
It is possible that foreign companies are now discovering that the Israeli market is likely to be interesting for them when they are trying to expand their base of investors. To this should be added the existing possibility of dual listing for companies listed on stock exchanges in the US, London, Toronto, Singapore, and Hong Kong. This arrangement enables companies whose securities are listed on overseas stock exchanges to also be dual-listed on the TASE, based on their reports according to the foreign law applying to them. “Globes” recently reported that the ASX was seeking inclusion in the dual listing arrangement. At the same time, it should be noted that the two companies now involved in roadshows in Israel have no interest in being listed on the TASE at this stage.
Precious metals and drugs
Wheaton’s model is called streaming. The company reaches agreements with owners of metals and undertakes to buy the commodities in exchange for an initial payment. The balance of the price is paid when the metals are supplied. As of now, according to the company’s website, it has agreements with 20 existing mines and nine more projects in the development stages. Wheaton believes that this model makes it possible to reduce the risk, in comparison with a conventional mining company. “Wheaton offers those who invest in it forward-looking capability in both the level of capital and operating costs,” the company’s website states.
Wheaton’s adjusted net profit was up 11.6% to $143 million in the first half of 2018, and its revenue rose 3.5% to $412 million, in comparison with the corresponding period last year.
CSL is an Australian company that started doing business 100 years ago in order to supply the health and pharmaceutical needs of the country. In its current format, the company was founded in 1991, and has since acquired a number of companies. Among other things, it now develops drugs for neurological diseases and hemorrhaging problems, as well as a flu vaccine. Local investors are likely to be familiar with CSL, because one of the treatments it is developing is for commercialization of Alpha-1, in which it is competing with Israeli company Kamada.
Published by Globes, Israel business news – en.globes.co.il – on October 22, 2018
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