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Tel Aviv Stock Exchange

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Tel Aviv Stock Exchange
TASE logo
TypeStock Exchange
LocationTel Aviv, Israel
Founded1953 (precursor 1935)
CurrencyIsraeli new sheqel
Websitewww.tase.co.il/TASEEng

The Tel Aviv Stock Exchange (TASE) in Tel Aviv (Hebrew: הבורסה לניירות ערך בתל אביב, colloquially known as the Bourse) is Israel's only stock exchange.

The TASE is the only public market for trading securities in Israel. It plays a major role in the Israeli economy. The precursor to the TASE was the Exchange Bureau for Securities, founded by the Anglo-Palestine Bank (which became Bank Leumi) in 1935. With rapid growth of the Israeli economy after the founding of the state, a formal stock exchange was incorporated and began operations in Tel Aviv in 1953. In 1983 the exchange moved to its current location in Tel Aviv.

TASE lists some 660 companies, about 60 of which are also listed on stock exchanges in other countries. TASE also lists some 180 exchange-traded funds (ETFs), 60 government bonds, 500 corporate bonds, and more than a 1000 mutual funds.

There are 29 members that make up TASE. The list of members indicates that one of the members is a candidate.

Listing

The Exchange offers four programs under which companies can list on the exchange: three programs for normal operating companies, and an additional venture program for development-stage technology companies. In addition, the TASE has a program for the listing of Limited Partnership Units.

The Dual Listing Law that took effect in October 2000 enables companies listed in the United States or London to dual-list on the TASE without any additional regulatory requirements. As of December 31, 2006, 39 Israeli companies have dual-listed on the TASE, in compliance with this framework.

As of 2007, the total market value of all listed equity securities was $202.7 billion, compared with $161.4 billion in 2006, $122.6 billion in 2005 and $92.1 billion in 2004.[1]

Trading

The TASE has a computerized trading system with real-time information. All shares, convertibles, treasury bills, government bonds, and derivatives are traded via TACT, the TASE’s fully automated trading system.

Trading in shares takes place Sunday through Thursday between 8:30 a.m. and 5:30 p.m. local time (GMT+2), overlapping the American markets for a full hour (9:30 a.m. to 10:30 a.m. EST). Bonds and Treasury bills are traded between 9:30 a.m. and 5:30 p.m. Derivatives trading runs from 9:30 a.m to 5:30 p.m.[2] [3] Dual listing is permitted and many larger Israeli companies are dually listed on the TASE and one or more foreign markets, usually the New York Stock Exchange or NASDAQ, but also the American Stock Exchange and London Stock Exchange.[4]

Between 2003 and 2006, share prices on the TASE rose sharply. The General Index of shares and convertible securities (which is comprised of all shares and convertible securities tradable on the TASE) increased in USD terms by 15.3% in 2006, compared with an increase of 24.3% in 2005 and an increase of 19.5% in the General Index in 2004.

During 2006, the Tel Aviv 100 Index and the Tel Aviv 25 Index increased in USD terms by 22.0% and 22.6% respectively, compared with an increase of 21.1% and 24.7%, respectively, in 2005. The average daily trading for equity securities increased to $326 million during 2006, compared with $223 million in 2005 and $147 million in 2004.

As of July 1, 2007, TASE's largest stocks by market cap were Teva Pharmaceutical Industries ($7.8B), Israel Chemicals ($2.5B), Bank Hapoalim ($1.5B) and Bank Leumi ($1.4B). Daily turnover of shares and convertibles in 2006 was USD 326 million, $387M of bonds, $179M of T-bills and 335M of options and futures. Total market cap at the end of 2006 was $161B shares and convertibles, $98.9B government and corporate bonds and $20.9B T-bills, a total of $281.2B. On July 4, 2007, TASE's benchmark TA-25 index closed at a record 1141.76.

TASE links to the U.S. markets with a direct link with DTC, a subsidiary of the Depository Trust & Clearing Corporation, which facilitates the trading of dually-listed securities.

Active involvement of foreign investors in the TASE began in 1994. In 2006, international holdings increased to 11.6% of the total market capitalization of the shares and convertible securities tradable on the TASE, compared to 11.4% in 2005 and 10.0% in 2004.[5]

Indices

The major stock market indices of the TASE include:

  • TA-25 - TASE's flagship index, listing TASE's 25 largest stocks by market cap. Also called the Ma'of.
  • TA-100 - TASE's 100 largest stocks
  • TA-75 - Stocks on TA-100 which are not included in TA-25
  • Mid-Cap 50 - The largest 50 shares which are not included in TA-100 (replaced the Yeter-30)
  • Yeter - All other TASE's stocks which are not included in TA-100
  • Tel-Tech 15 - TASE's 15 largest high-tech stocks
  • TA Real-Estate 15 - TASE's 15 largest real-estate sector stocks
  • TA Finance 15 - TASE's 15 largest Finance sector stocks
  • Tel-Div 20 - Index of the 20 issues listed on the TA-100 with the highest annual dividend yield.
  • Maala - socially responsible investing index
  • Tel-Bond 20 - consists of the 20 corporate bonds, fixed-interest and CPI-linked, with the highest market cap among all the bonds traded on the TASE.

These and other indices are explained on the TASE website indices section.

Regulation and controls

The TASE is highly regulated, both internally and externally. The exchange is regulated by the Securities Law (1968), and falls under the direct supervision of the Israel Securities Authority. Internal regulations include automatic rejection of a trade at a price that deviates more than 35% from the last trade for that security, circuit breakers, and 45-minute halting of trade in a company’s securities on the day that the company publishes price-sensitive information, so that the information can be widely disseminated. The TASE’s rules govern membership, registration of securities, conditions for suspending trading, and obligations of listed companies.[5]

Clearinghouses

Two clearinghouses operate at the TASE as subsidiaries:

  • The TASE Clearing House was established in 1966. It clears all securities transactions executed on and off the stock exchange and carries out income payments on behalf of companies. The TASE Clearing House also operates a Global Clearing, Settlement and Custody Services unit in collaboration with Citigroup.
  • The Derivatives Clearing House was established in 1993 with the opening of the TASE derivatives market. It is responsible for clearing options and futures traded on the TASE.

References

  1. ^ Standard & Poor's - The Tel Aviv Stock Exchange
  2. ^ TASE Site - Trading Schedule
  3. ^ TASE Site - TACT Overview
  4. ^ TASE Site - Dual Listing
  5. ^ a b SEC Info - Israel State of - 18-K/A - For 12/31/06 - EX-99.D
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