The Tel Aviv Stock Exchange turned to an outsider to lead its effort to curb a plunge in trading volume, tapping Yossi Beinart as chief executive officer after a three-month search.
Beinart, currently the CEO of IG Group Holdings Plc (IGG)’s Nadex market, will replace Ester Levanon, who resigned after seven years as head of the exchange. While Beinart studied computer science at the Hebrew University in Jerusalem, he has spent more than 20 years working at U.S.-based companies from brokerage Investment Technology Group Inc. (ITG:US) to ShieldIP Inc., a provider of flexible Digital Rights Protection solutions, according to a resume posted on Chicago-based Nadex’s website.
Beinart will oversee trading of companies including Teva Pharmaceutical Industries Ltd. (TEVA) and Israel Chemicals Ltd. (ICL) in a nation where volume has plunged 44 percent between the start of 2010 and the end of last year. He is scheduled to start in the post at the end of the year, joining from IG Group, which offers a service known as spread betting that allows investors to wager on market outcomes. The unit he leads, Nadex, lets customers bet on prices for financial products such as Standard & Poor’s 500 Index futures and gold.
“He is an unknown to the local market,” Yaniv Pagot, chief strategist at the Ayalon Group Ltd., an institutional investor with 14 billion shekels ($4 billion) in assets, said yesterday by phone after the appointment. “He has to build a senior local team that understands the market and is respected by its players. Without this, the romance will not succeed.”
Levanon’s departure followed a failed bid for Israel to join MSCI Inc.’s Europe index, which she said could have lured $2 billion to the country. Trading volume in Israel has dwindled since the country was raised to developed-market from from emerging-market status at MSCI in May 2010. While Israel has more active startups per capita than any country, the exchange is failing to attract companies like Wix.com, a web platform developer, which prefers a Nasdaq listing.
Israel’s TA-25 index has advanced 8.7 percent this year compared with a 23 percent gain for the S&P 500 Index, the benchmark measure for U.S. shares.
“The new CEO has his work cut out for him,” Zach Herzog, a Tel Aviv-based trader at Psagot Securities, a unit of Psagot Investment House Ltd. that manages more than 178 billion shekels, said by phone before the nomination. “Trading volumes need to be increased, and the market needs to be made more investable to foreign investors.”
Levanon and bourse Chairman Saul Bronfeld resigned amid a feud between regulators and exchange officials over who is to blame for the exchange’s troubles. Bronfeld, a former Bank of Israel chief economist, cited government regulations and slower economic growth for the exodus of investors and companies. Israel Securities Authority Chairman Shmuel Hauser says the bourse’s management is also responsible.
Nadex offers trading in binary options, a type of derivative that investors can use to speculate on an event such as the S&P 500 rising above a certain value by a specific time of day. Some of Nadex’s most-traded contracts include those based on equity indexes, gold and currency pairs such as the U.S. dollar and euro, according to the company’s daily trading bulletin.
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