International Investors and Israeli companies

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International Investors and Israeli companies
Darren Shaw 972-9-960-0113
June, 2007
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Contents

• Importance benefits of international investors
• What concerns international investors
• Israeli companies and intl investors
  comparison with other countries
• UBS Israels Top 10 suggestions for a good CFO to
  attract intl investors

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Importance benefits of international investors

• We estimate intl investors account for 30-70 of
  the volume of the TA25 and TA100
• Stocks with large intl following typically trade
  on higher multiples
• Companies who consistently meet intl investors
  are able to reduce risk of stock overhang
• Examples
• Important to be covered by global houses and be
  compared with international peers

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What concerns international investors?

• Politics
• Geo Politics
• Economics
• Company Specific

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1) Internal Politics

• Stability of Country despite weakness of Olmerts
  Government
• Netanyahu well liked so risk of new elections
  changing the economy etc low
• Compare to Turkey, Russia
• Does it matter?

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2) Geo Politics

• Key message Geo political risk lowered
• This is why market has been so strong since the
  2006 Lebanon War
• Intl investors reacted during Intifida, but not
  during 2006 Lebanon War
• Intl investors have started to live with risk
• Not concerned by Gaza, Hezbullah, Hamas nor Iran

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3) Economics

• Economy on auto-pilot, good GDP growth, low risk
  of disappointment
• Most investors in Israel comparing to Russia,
  turkey etc which are higher risk
• Resilience investors positively surprised by
  economy post war
• Other positives, currency, interest rates,
  inflation, current account, FDI

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Israeli companies and intl investors
comparison with other countries

• Transition from local to global market place
• Global issues remain a risk
• Expect closer correlation with global markets
  than before

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What do investors focus on?

• Mainly focus on TA-25
• Of these, most traded are Teva, Banks, Chemicals
• IPOs, Secondary Listings, Block Trading
• Strong investor relations
• ENGLISH !

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What do investors want?

• Free float, liquidity
• Access to senior management
• English speaking, SIMULTANEOUS English press
  releases, English conference calls
• Transparency, disclosure, honesty
• Roadshows with senior management
• Impressive CFOs and CEOs with good English who
  explain strategy

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UBS Israels Top 10 suggestions for a good CFO to
attract intl investors

• Increase free-float
• Block trades with shares sold to intl investors
• Strengthen investment in investor relations
  (guaranteed success!)
• User expertise of global investment houses
• Regular roadshows with senior management
• Dont hide the key people!
• Be available for key analysts and investors
• Explain strategy
• Widen investor base
• THINK ENGLISH (English speaking, press releases,
  conference calls)