International Investors and Israeli companies Darren Shaw 972

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

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

Contents ¨ Importance & benefits of international investors ¨ What concerns international investors ¨

Contents ¨ Importance & benefits of international investors ¨ What concerns international investors ¨ Israeli companies and int’l investors – comparison with other countries ¨ UBS Israel’s Top 10 suggestions for a good CFO to attract int’l investors 1

Importance & benefits of international investors ¨ We estimate int’l investors account for 30

Importance & benefits of international investors ¨ We estimate int’l investors account for 30 -70% of the volume of the TA 25 and TA 100 ¨ Stocks with large int’l following typically trade on higher multiples ¨ Companies who consistently meet int’l investors are able to reduce risk of stock overhang ¨ Examples ¨ Important to be covered by global houses and be compared with international peers 2

What concerns international investors? ¨ Politics ¨ Geo Politics ¨ Economics ¨ Company Specific

What concerns international investors? ¨ Politics ¨ Geo Politics ¨ Economics ¨ Company Specific 3

1) Internal Politics ¨ Stability of Country despite weakness of Olmert’s Government ¨ Netanyahu

1) Internal Politics ¨ Stability of Country despite weakness of Olmert’s Government ¨ Netanyahu well liked so risk of new elections changing the economy etc low ¨ Compare to Turkey, Russia ¨ Does it matter? 4

2) Geo Politics ¨ Key message – Geo political risk lowered ¨ This is

2) Geo Politics ¨ Key message – Geo political risk lowered ¨ This is why market has been so strong since the 2006 Lebanon War ¨ Int’l investors reacted during Intifida, but not during 2006 Lebanon War ¨ Int’l investors have started to live with risk ¨ Not concerned by Gaza, Hezbullah, Hamas nor Iran 5

3) Economics ¨ Economy on auto-pilot, good GDP growth, low risk of disappointment ¨

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 6

Israeli companies and int’l investors – comparison with other countries ¨ Transition from local

Israeli companies and int’l 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 7

What do investors focus on? ¨ Mainly focus on TA-25 ¨ Of these, most

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 ! 8

What do investors want? ¨ Free float, liquidity ¨ Access to senior management ¨

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 9

UBS Israel’s Top 10 suggestions for a good CFO to attract int’l investors ¨

UBS Israel’s Top 10 suggestions for a good CFO to attract int’l investors ¨ Increase free-float ¨ Block trades with shares sold to int’l investors ¨ Strengthen investment in investor relations (guaranteed success!) ¨ User expertise of global investment houses ¨ Regular roadshows with senior management ¨ Don’t hide the key people! ¨ Be available for key analysts and investors ¨ Explain strategy ¨ Widen investor base ¨ THINK ENGLISH (English speaking, press releases, conference calls) 10