Wall Street might be the global financial capital, but for Israeli companies, there is no place like home. A startling new report reveals that dual-listed Israeli firms are seeing significantly higher growth on the Tel Aviv Stock Exchange compared to their parallel listings on the NASDAQ.
The data challenges the long-held assumption that foreign markets always offer superior liquidity and value for tech giants. It appears that local investor sentiment is driving a massive shift in trading behavior.
The Power of Home Court Advantage
The allure of the American stock market has always been strong for Israeli tech firms. However, the latest figures from the Tel Aviv Stock Exchange (TASE) tell a different story. The “home factor” is proving to be a dominant force in driving stock performance.
Israeli companies listed on both exchanges saw their trading volume in Tel Aviv surge by 68 percent.
In contrast, the same shares only saw a 55 percent increase in volume on the NASDAQ. This gap highlights a growing preference among investors to keep their money within the local ecosystem.
Yuval Tsuk, an economist at the TASE research unit, attributes this trend to investor comfort. He notes that when given a choice, investors often opt for the market they know best. This psychological safety net creates a stronger base of support for companies trading on their home turf.
This phenomenon is not just about national pride. It is about market mechanics and accessibility. Local investors feel more connected to these brands and understand the local economic landscape better than foreign traders do.
Why Investors Are Choosing Local
The disparity in performance is not just about sentiment. There are practical reasons driving this shift. Trading in Tel Aviv offers distinct logistical advantages for domestic investors that Wall Street simply cannot match.
One major factor is the trading schedule. The TASE operates from Sunday to Thursday. This allows investors to react to developments over the weekend before US markets open on Monday.
Conversion costs also play a critical role in this decision.
Buying stocks in New York requires converting Shekels to Dollars. This adds a layer of fees and currency risk that does not exist when buying the same stock in Tel Aviv. For a local institutional investor or a retail trader, sticking to the TASE saves money immediately.
Here is a quick look at why the local exchange is winning:
- Currency Safety: No need to hedge against the US Dollar.
- Trading Hours: The Sunday session provides a head start on global markets.
- Lower Fees: Local transactions often carry lower commissions for Israeli bank account holders.
- Tax Simplicity: Managing taxes is often more straightforward with domestic securities.
These friction points make the “US version” of the share less attractive for a large portion of the capital available in Israel.
Breaking Down the Market Data
The numbers released in the report paint a picture of a robust local market that is punching above its weight. The growth is not limited to just a few small companies. It affects major players in the market.
Dual-listed companies now account for roughly 22 percent of the total market value.
This is a significant chunk of the exchange. It indicates that the heavy hitters in the Israeli economy are relying on the TASE for liquidity just as much as they rely on foreign exchanges.
The table below illustrates the growth gap identified in the recent study:
| Metric | Tel Aviv Stock Exchange (TASE) | NASDAQ (US) |
|---|---|---|
| Trading Volume Growth | 68% | 55% |
| Investor Preference | High (Home Bias) | Moderate |
| Currency Impact | Neutral | High Exposure |
This data suggests that the liquidity in Tel Aviv is stickier. In times of volatility, local investors tend to hold on or buy the dip. Foreign investors might be quicker to exit emerging markets during global downturns. This stability makes the TASE listing vital for the long-term health of these companies.
What This Means for Future IPOs
This report could change how Israeli startups plan their exit strategies. For years, the ultimate dream was a NASDAQ IPO. While that remains prestigious, this data suggests it should not be the only goal.
Companies might now look at a dual-listing strategy much earlier in their lifecycle.
Listing in Tel Aviv provides a safety net of loyal liquidity that foreign markets cannot guarantee.
If a company can secure a 68 percent volume increase at home, ignoring the local exchange becomes a bad business decision. It also sends a signal to the government and regulators. They need to keep ensuring the local market remains competitive.
We are likely to see more encouragement for “blue and white” companies to keep their primary or secondary listing in Israel. The era of fleeing to New York as soon as a company hits a billion-dollar valuation might be evolving into a more balanced approach.
The message to CEOs is clear. Do not neglect your backyard. The investors next door are ready to trade, and they are bringing more volume to the table than the traders on Wall Street.
