Tel Aviv Stock Exchange
The Tel Aviv Stock Exchange, colloquially known as The Bursa, is the only public stock exchange in Israel and a public company itself, listed on its own exchange since August 1, 2019. It is regulated by the Securities Law and is under the direct supervision of the Israel Securities Authority.
The TASE plays a significant role in the Israeli economy, facilitating the trade of securities and the raising of capital and debt for companies and the government on the Israeli capital market. Trading on the TASE is conducted exclusively through its 23 members, which include major banks and investment houses that collect a fee for their services.
The TASE was founded in 1953, with its precursor dating back to 1935. As of 2021, it lists 473 companies, 901 series of corporate bonds, 204 series of government bonds, 416 index-tracking products, and 1,231 mutual funds. The exchange's market capitalization for equities stands at US$ 216 billion, and for bonds at US$ 196 billion.
History and milestones
The Tel Aviv Stock Exchange was established in 1953. Even prior to this, commencing in 1935, securities trading was carried out in the Land of Israel and, afterwards, in the State of Israel at the mandate-period Anglo-Palestine Bank. The trade was conducted at the bank, in the office of Mordechai Pinchas Hasson, an Israeli banker who was one of the founders of the Exchange Bureau of Securities and the CEO of Bank Leumi. In the office that served as the stock exchange, daily trading within the framework of the "Exchange Bureau of Securities" lasted for just one hour. Among those that conceived the original idea were bankers who had immigrated from Germany such as Max Kollenscher and his brother Leo. In 1968, TASE activity was regulated by law and the Israel Securities Authority, which supervises TASE activity, was established.In 1983, TASE was hit by the bank stock crisis, during which the share price of Israel's four largest banks collapsed – resulting in the state's nationalization of the banks and a third of the public's investment in them being wiped out. In the same year, TASE moved from its premises at 113 Allenby Street to a building at 54 Ahad Ha'Am Street, Tel Aviv. In 1993, trade in derivatives commenced. In 1999, TASE brought down the curtain on the trading floors era and completed the changeover to fully automated trading making use of a "continuous" trading system. In 2000, the Knesset passed Amendment No. 21 to the Securities Law, which makes it easier for companies whose shares are listed in the United States, to also list in Tel Aviv. In July 2005, dual listing was expanded to include companies listed on the London Stock Exchange's Main Market and the Nasdaq Small Cap Market. Today, tens of dual-listed companies are traded on TASE. In 2005, market makers began operating on TASE. In 2007, the annual volume of securities and convertibles hit a new record of NIS 593.2 billion.
Since 2008, after the 2008 financial crisis, the tightening of the regulatory regime in which TASE operates and other factors, the number of trading participants and trading volumes have become less significant. In 2012, the annual volume of securities and convertibles amounted to just NIS 265.1 billion – the lowest volume since 2004.
In 2016, TASE launched an analysis project for high-tech companies, within the framework of which the international research company, Frost and Sullivan, publishes informational and financial analyses regarding technology and biomed companies that are listed on TASE.
In 2017, the TASE indices underwent a reform – "the diffusion reform", which had several objectives, including: improving the stability of the TASE indices, broadening the sectoral diffusion within the various indices, setting more stringent threshold terms for the flagship indices and easing the threshold terms for the other indices, encouraging foreign investors to invest in the TASE indices, significantly increasing the free float rate for the shares included in the flagship indices, fully realizing the potential of small and medium company shares, and enlarging the infrastructure for launching new indices. At the beginning of 2017, the Knesset passed the second and third readings of a law for TASE's demutualization, which created the outline for turning it into a for-profit company.
In April 2017, the Knesset passed an amendment of the Securities Law enabling changes to TASE's ownership structure; in September 2017 the District Court ratified the TASE demutualization arrangement, enabling changes to TASE's ownership structure, whereby TASE became a for-profit company, while separating the ownership and control of TASE from membership therein. The Israel Securities Authority has regulatory oversight over TASE's operations, as well as over the Tel-Aviv Clearing House, the MAOF Clearing House and the Tel-Aviv Stock Exchange Nominee Company, which are wholly owned subsidiaries of TASE.
In 2018, the Nominee Company was established as a private subsidiary of TASE. The Nominee Company is engaged in two main areas of activity: it ensures the proper and complete registration of the number of securities registered in its name and serves as a conduit for the transfer of payments deriving from corporate actions between the issuing companies and the end-holders of the securities. In August 2018, the Israel Securities Authority approved] the sale of 71.7% of TASE's shares to five groups of foreign investors. On August 1, 2019, trade in TASE shares commenced on the Tel-Aviv Stock Exchange.
The 2017 indices reform
At the beginning of 2017, TASE carried out a comprehensive reform of the security indices listed on it and established new indices. Among the principal changes made by the reform was expanding the number of shares included in each index and lowering a share's maximum weighing in an index. For instance, the Tel Aviv 25 Index, which was considered TASE's flagship index was expanded from 25 to 35 shares, with its name being changed to the TA- 35 Index, accordingly. The maximum weighting for a share in the Index was reduced from 10% to 7%. One of the main objectives of the reform was to reduce the level of concentration in the indices. Since more than 70% of the Index's weighting related to just 10 shares, a sharp change in the value of just one of these would cause the Index to react dramatically, and the Index was considered to be too concentrated.
As part of the reform, new indices were created with the aim of raising investors' interest in TASE and increasing activity thereon. The new indices that were created are: the TA-BlueChip15Price, the TA-SME150 and the TA Rimon indices.
TASE members
The Israeli Stock Exchange has 23 membersThe central Bank of Israel
|
TASE's home
In 1960, TASE moved to its own premises in the "Passage" at 113 Allenby Street in Tel Aviv and, in February 1983, TASE moved premises to 54 Ahad Ha'Am Street in Tel Aviv. In 2001, a Visitors Centers was opened on the historic trading floors of the TASE building. Educational visits took place in the Visitors Center, as well as conventions and events associated with the capital marketOn July 24, 2014, TASE moved to its new home [on the corner of Montefiore Street and Ahuzat Bayit Street, close to the Shalom Meir Tower. The TASE complex stands on a one and a half dunam plot that was acquired by it in 2007 at a cost of NIS 58 million and construction took five years. The 14 story building tops out at 60 meters and has 22,600 m2 of floor space. The nonstandard ratio between the number of stories and the building's height is due to the building having stories with high ceilings, such as the ground floor that rises to a height of 10 meters.
Growth
In 1993 TASE had the third largest number of IPOs of all the world stock exchanges.In 2005, non-Israeli investment in TASE reached an all-time high of NIS 2 billion, while the TA-25 increased 34%. By the end of the year foreign investment banks UBS, Deutsche Bank, and HSBC had become members of TASE.
In 2007, trading averaged $500 million a day, a 55% increase over the previous year. The number of exchange-traded funds grew to 240. The Tel Bond-20 index was also launched that year. The TA-25 rose 175% in the period 2004–07.
In May 2008 Northern Trust started the first US exchange-traded fund on the NYSE based on TASE's benchmark, the TA-25 Index.
Performance
As of May 25, 2010, TASE's largest stocks by market capitalization were Teva Pharmaceutical Industries, Israel Chemicals, Bank Leumi, and Bezeq. Daily turnover of shares and convertibles in 2009 was US$432 million, $1,035M of bonds and exchange-traded notes, $163M of T-bills, and 252,000 options and futures contracts. Total market capitalization at the end of 2009 was $189bn shares and convertibles, $174bn government and corporate bonds, and $23bn T-bills, a total of $386bn. On April 25, 2010, TASE's benchmark TA-25 index reached a record high of 1,239 points.For the decade ending 12 February 2012, the TA–25 index topped the Bloomberg Riskless Return Ranking list, outperforming 23 other developed-nation benchmark indexes when adjusting for volatility.
CEO Ester Levanon resigned on 18 July 2013, effective 31 December 2013. A week later, on 25 July 2013, Chairman Saul Bronfeld resigned. According to Bloomberg, the executives' decisions follow a drop in trading volume and the bourse's failed bid to join MSCI Inc.'s Europe Index. Bronfeld, who served as chairman since 2006, cited the "hostile control" by the Israel Securities Authority and the regulator's interference in the executive management of the bourse as the main reasons for his resignation.
Increase in trading volumes in 2020
The average daily trading volume on the equities market in 2020 amounted to approximately NIS 1.9 billion, some 35% higher than the average volume in the years 2015–2019. The major contributor to the rise in trading volumes was global coronavirus pandemic, which reached Israel in February 2020, and led to a steep increase in trading volatility on the markets.
Growth in the number of retail accounts with Israeli members of TASE in 2020
The Israeli capital market was stormed by the local retail public in 2020, which opened a significantly greater number of new accounts with TASE members than in 2019. Some 141,000 new accounts were opened by the general public during 2020, compared to some 98,000 new accounts in 2019, a 44% increase. The pace at which non-bank members acquired new members – some 170% more than in 2019 – was particularly noticeable. Among the banks, the growth was 36% up on the previous year.