Israel Seeks U.S. Biotech Investors as Index Plunges
The Tel Aviv Stock Exchange is seeking to lure investment to biomedical companies after the life sciences index fell twice as much as a measure for technology stocks.
“Part of the volatility was because investors weren’t familiar with these companies,” Tel Aviv Stock Exchange Chief Executive Officer Ester Levanon, 64, said by telephone from New York, where she is holding a conference today on the industry. “We’re trying to bring the biomed companies closer to investors and raise the awareness of their businesses.”
The Tel Aviv Biomed Index of 27 companies dropped 21 percent since it was initiated on March 3, lagging behind the Tel-Tech gauge of 15 technology companies, which has lost 9.2 percent. The benchmark TA-25 Index climbed 7.4 percent during the same period, according to data compiled by Bloomberg.
Given Imaging Ltd., the maker of a capsule-sized camera for diagnosing digestive ailments, has declined 20 percent since the biomed index started. The company has the fourth-biggest weighting in the measure at 8.7 percent. The Yoqneam, Israel- based firm reported a 74 percent decline in third-quarter profit and cut its 2010 forecast on Nov. 4.
Lack of Liquidity
“Investors preferred to invest in companies with stable income and positive cash flow in a time of quite big uncertainty in the market,” Uriel Goren, the head of equities sales at Tel Aviv-based DS Securities & Investments, said by telephone.
Fourteen companies are being featured at the conference today with a goal of promoting them and the industry, Levanon said in her opening markets for the meeting.
“There have been quite a few successful companies that have emerged from the area,” Sameer Harish, the vice president of health care equity research at Needham & Company LLC, said at the conference today. “Still, investors are interested in finding quality growth stories and are less interested in where these companies are coming from.”
The Tel Aviv exchange will expand indexes for technology companies, including a measure of 50 firms that will include biomed, Levanon said in an interview last month.
The Israeli market, upgraded by MSCI Inc. on May 27 to developed market status from emerging, recorded a net $1.08 billion of sales of Tel Aviv-traded shares by foreign investors in the second quarter, central bank data show.
Among 140 technology companies listed on the Israeli exchange, 50 are biomedical firms, and more companies in the industry are planning initial share sales, Levanon said.
“Our target is to have a critical mass of companies in order to attract more local and foreign investors,” Levanon said.
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