JERUSALEM, Aug 18 (Reuters) - Haifa, Israel's third-largest city, is launching a plan to set up a second stock exchange in the country in the hopes of creating another financial centre in addition to Tel Aviv, the city's mayor told Reuters.
Haifa, which lies some 90 km (56 miles) north of Tel Aviv, Israel's financial and commercial hub, is Israel's largest port and home to research and centres run by the likes of Intel Corp , IBM, Google Inc, Apple Inc, Yahoo! Inc, Microsoft Corp and Philips .
Haifa Mayor Yona Yahav said he had written to Finance Minister Yair Lapid requesting permission to open a technology-based stock market, which would rival the Tel Aviv Stock Exchange (TASE).
"It would be something which is close to the Nasdaq," he said, referring to the tech-heavy U.S. exchange run by Nasdaq OMX Group Inc.
The municipality is also seeking financial partners to help establish the bourse. "We believe this will lift growth in the northern region of Israel," said Yahav, who acknowledged the city which has a population of some 275,000 had attempted a similar venture in the 1990s.
Some analysts were sceptical of the idea, particularly as the TASE is going through a tough time.
"The first one (TASE) is sick at the moment, so to add a second one doesn't make sense," said veteran market analyst Richard Gussow. "First, cure the main stock exchange in Tel Aviv and then start thinking about a second exchange."
The number of companies listed on the TASE has shrunk to 475 from 654 since 2007, while average daily trading volume has fallen sharply during the past two years. Some Israeli firms prefer to head straight to New York and bypass Tel Aviv.
Disagreements on how to revive the TASE cost the jobs of both the bourse's chief executive and chairman last year. Its new CEO Yossi Beinart has said he aims to add another 100 companies to the exchange in the next five years and to cater more for small and medium-sized companies.
Yahav denied that setting up a new exchange would harm the TASE. "I have never heard before that competition is damaging," he said. "Israel is being built on one economic centre - the state of Tel Aviv. This is unprecedented in the world."
However Yahav's plan flies in the face of an established consolidation trend among major western bourses, designed to save money in trading technology and attract crucial levels of liquidity without which any bourse cannot survive.
The Finance Ministry said it had not yet received any formal request from Haifa, while the Israel Securities Authority said it was not familiar with the initiative.
The TASE declined to comment. (Editing by David Holmes)