Ten Year Israeli Stock Performance
by Yated Ne'eman Staff
In January and February 1994, there were 59 initial public
offerings (IPOs) on the Tel Aviv Stock Exchange, an unusually
large number. An IPO is an offering of stock by a company to
the public. Now, ten years later, this is a summary of what
happened with them. It should be noted that these figures are
typical for any stock market, and better than many stock
markets. Buying stock at the IPO is often thought to be a
sure thing, but this perspective shows that this is not
At the bottom of the list are 27 percent of the companies
that have collapsed, gone into liquidation or caused
investors to lose more than 90 percent of the money they
invested at the IPO. The rest did better, but many are still
far from good.
Of those companies, 17 percent of them were delisted. This
means that they were taken off the stock exchange by the
owners. Generally it means that the majority shareholders
bought back all of the stock that was in the hands of the
public. In most cases, the buy-back was below the IPO level.
In some cases, the offer arrived just before an upturn in the
The next segment are the 32 percent that generated negative
real returns. These did not hold their value since the
comparison is to an investment that is linked to the cost of
living that only preserved the value.
Another 10 percent generated positive real returns, but still
less than short- term Bank of Israel certificates, the most
conservative investment in Israel. The investors accepted the
high risk, but received less reward than they'd have received
on the lowest-risk shekel assets.
The top group were the 14 percent of the companies exceeded
the yield on short- term Bank of Israel makam certificates.
One out of seven was a good investment.