Tel Aviv Stock Exchange facts for kids
| Tel Aviv Stock Exchange | |
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Quick facts for kids  |
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| Type | Stock exchange, Public company |
| Location | [[Tel Aviv]], Israel |
| Founded | 1953 (precursor 1935) |
| Owner | 15 banks and 11 investment houses |
| Key people | *Arik Steinberg, Chairman
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| Currency | New Israeli Shekel |
| No. of listings | 473 companies listing equities 901 series of corporate bonds 204 series of government bonds 416 index-tracking products 1,231 mutual funds |
| MarketCap | Equities: US$ 216 billion; Bonds: US$ 196 billion |
| Volume | 546 million US$ daily (2010) |
| Indexes | *TA-35 Index
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The Tel Aviv Stock Exchange (TASE), also known as The Bursa, is Israel's only public stock exchange. It is a place where people and companies can buy and sell parts of companies (called shares) or lend money to companies and the government (called bonds). TASE is a public company itself, meaning its own shares can be bought and sold on its exchange. It started trading its own shares on August 1, 2019.
TASE is very important for the Israeli economy. It helps companies and the government get money for their projects by selling shares or bonds. Only 23 special members, like big banks and investment firms, can trade directly on TASE. They charge a small fee for their services.
The TASE was officially started in 1953, but people were trading securities in Israel even earlier, starting in 1935. As of 2021, many different things are traded on TASE. This includes shares from 473 companies, different types of bonds, and other investment products. The total value of all shares traded on TASE is about US$216 billion.
Contents
How the Tel Aviv Stock Exchange Started
The Tel Aviv Stock Exchange officially opened in 1953. But even before that, people were trading shares in Israel. This started in 1935 at the Anglo-Palestine Bank, which is now called Bank Leumi. Trading happened for just one hour each day in a special office.
In 1968, new laws were made to control how TASE worked. The Israel Securities Authority (ISA) was also created to watch over TASE and make sure everything was fair.
Key Moments in TASE History
In 1983, TASE faced a difficult time with bank shares. In the same year, TASE moved to a new building at 54 Ahad Ha'Am Street in Tel Aviv.
In 1993, TASE started trading derivatives, which are special financial contracts. By 1999, TASE stopped having people shout orders on a trading floor. Instead, it switched to a fully computer-based trading system. This system allows trading to happen continuously throughout the day.
In 2000, a new law made it easier for companies listed in the United States to also list their shares on TASE. This is called "dual listing." Later, in 2005, this was expanded to include companies listed on the London Stock Exchange and Nasdaq. Today, many companies are listed on TASE and other stock exchanges at the same time.
Since 2008, trading volumes on TASE have changed. In 2012, the amount of trading was lower than in previous years.
In 2016, TASE started a project to help high-tech companies. They began publishing reports about technology and biomed companies listed on TASE.
Big Changes in 2017
In 2017, TASE made big changes to its main lists of shares, called indices. These changes aimed to make the indices more stable and include a wider variety of companies. They also wanted to encourage more international investors to trade on TASE.
Also in 2017, a new law allowed TASE to become a for-profit company. This meant TASE could make money from its operations, rather than just being a non-profit organization. This change also separated who owned TASE from who was a member and could trade on it.
In 2018, TASE created a new company called the Nominee Company. This company helps make sure shares are properly registered and that payments like dividends (money paid to shareholders) get to the right people.
In August 2018, foreign investors bought a large part of TASE's shares. Then, on August 1, 2019, TASE's own shares began trading on its exchange.
The 2017 Indices Reform
At the start of 2017, TASE updated its lists of shares, called security indices. They also created new indices. One big change was increasing the number of shares in each index and lowering how much one share could influence an index.
For example, the Tel Aviv 25 Index, which was TASE's most important index, grew from 25 to 35 shares. It was renamed the TA-35 Index. This change helped spread out the influence, so one company's shares wouldn't affect the index too much.
New indices like TA-BlueChip15Price and TA-SME150 were also created. These new lists aimed to make TASE more interesting for investors and increase trading activity.
Who Are TASE Members?
The Tel Aviv Stock Exchange has 23 members. These are the only groups allowed to trade directly on the exchange.
- 3 Foreign Banks:
- Barclays Bank PLC (UK)
- Citibank, N.A. (USA)
- HSBC Bank PLC (UK)
- 11 Israeli Commercial Banks:
- Union Bank of Israel Ltd.
- Israel Discount Bank Ltd.
- Mercantile Discount Bank Ltd.
- Bank Hapoalim B.M.
- Bank of Jerusalem Ltd.
- Bank Leumi Le-Israel B.M.
- Mizrahi Tefahot Bank Ltd.
- Bank Yahav Government Employees Ltd.
- First International Bank of Israel Ltd.
- Bank Otsar Ha-Hayal Ltd.
- Bank Massad Ltd.
- 2 Foreign Investment Houses:
- UBS Securities (Switzerland)
- Citigroup Financial Products Israel (UK)
- 5 Israeli Investment Houses:
- Excellence Nessuah Brokerage
- Psagot Securities
- Meitav Dash Trade
- Israel Brokerage and Investments IBI
- 3 Remote Members:
- Merrill Lynch International
- Flow Traders B.V
- Jefferies
Where is TASE Located?
TASE has moved its home several times. In 1960, it moved to its own building at 113 Allenby Street in Tel Aviv. In 1983, it moved again to 54 Ahad Ha'Am Street. A Visitors Center was opened in 2001, where people could learn about the stock exchange.
On July 24, 2014, TASE moved to its newest home. This modern, 14-story building is located at the corner of Montefiore Street and Ahuzat Bayit Street in Tel Aviv. It took five years to build this new, tall building.
How TASE Has Grown Over Time
In 1993, TASE had one of the highest numbers of new companies selling shares for the first time (called IPOs) compared to other stock exchanges worldwide.
By 2005, money invested in TASE by people outside Israel reached a record high of NIS 2 billion. Also, the main TASE index, the TA-25, grew by 34%. By the end of that year, big international banks like UBS, Deutsche Bank, and HSBC became members of TASE.
In 2007, the average daily trading value was $500 million, which was a big increase from the year before. The TA-25 index also grew a lot between 2004 and 2007.
In May 2008, the first US investment fund based on TASE's TA-25 index started trading in the United States.
TASE Performance and Trading
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As of May 25, 2010, some of the largest companies on TASE by value were Teva Pharmaceutical Industries, Israel Chemicals, Bank Leumi, and Bezeq. In 2009, the daily trading value for shares and other products was about US$432 million.
For the ten years leading up to February 2012, the TA-25 index was a top performer globally. It did better than many other major stock market lists when considering how risky the investments were.
In 2013, the CEO and Chairman of TASE resigned. This happened after trading volumes dropped and TASE was not able to join a major European index.
Trading Volumes in 2020
In 2020, the average daily trading volume for shares on TASE was about NIS 1.9 billion. This was 35% higher than the average from 2015-2019. The main reason for this increase was the global coronavirus pandemic, which caused a lot of activity and changes in the markets.
More People Investing in 2020
In 2020, many more people in Israel started investing in the stock market. About 141,000 new investment accounts were opened, which was a 44% increase from 2019. This shows a growing interest from regular people in the Israeli capital market.
Dividends in 2023
Even with big events like war and legal changes, about 40% of companies on TASE paid out dividends (a share of their profits) to their shareholders in 2023. This included companies in energy, oil, gas, banking, and financial services.
TASE reported that 206 companies paid out about 27.2 billion shekels in dividends in 2023. This was a little less than the record high in 2022. More of these dividends went to the general public in 2023 than in 2022. The average dividend paid out was about 2.9% of the share value, which was the highest since 2017.
TASE's International Connections
TASE has signed agreements with other major stock exchanges around the world. These agreements help make it easier to trade shares that are listed on both exchanges.
- In February 2007, TASE signed an agreement with the London Stock Exchange.
- In November 2007, a similar agreement was made with The Nasdaq Stock Market.
- In July 2008, TASE partnered with NYSE Euronext.
- In November 2008, TASE and the Shanghai Stock Exchange signed an agreement to learn from each other and encourage trade.
- In February 2010, TASE and the Toronto Stock Exchange also signed an agreement to build stronger ties.
How Trading Works at TASE
TASE operates from Sunday through Thursday. It is closed on Fridays because it is a short workday in Israel. It also closes on Israeli national and religious holidays. Sometimes, people discuss changing the trading days so TASE would be open on Fridays and closed on Sundays, to match other major global stock exchanges.
Trading at TASE happens in five steps each workday: "Pre-opening," "Opening auction," "Continuous trading," "Pre-closing," and "Closing auction." Trading generally takes place from 9:25 AM to 5:25 PM local time.
What Can You Trade on TASE?
Many different financial products are traded on TASE:
- Equities: These are shares that show you own a part of a company.
- Bonds: These are like loans you give to a company or the government. They promise to pay you back with interest.
- Corporate bonds: Bonds issued by a company.
- Government bonds: Bonds issued by the government of Israel.
- "Makams" (T-Bills): These are short-term bonds issued by the Bank of Israel.
- Convertible bonds: These are bonds that can be changed into shares of a company later.
- Exchange Traded Notes (ETNs): These are investments that follow the price of a product or a financial index.
- Exchange Traded Funds (ETFs): These are funds that invest in a group of shares to match a specific index. They are traded on TASE like regular shares.
- Mutual funds: These are funds managed by experts who invest money for you based on a plan.
- Option warrants: These give you the right to buy shares or bonds at a set price.
- Derivatives (MAOF market): These are contracts based on the future value of an index, shares, or exchange rates. Options on the TA-35 Index are very popular.
- TASE UP: This is a special platform for private companies to raise money from big investors. Companies on TASE UP remain private and don't have to follow all the rules of public companies.
- TASE Data Hub: This system, launched in 2020, allows people to access TASE's financial data.
Trading Fees at TASE
TASE charges fees to its members for every trade. These fees are usually very small.
If you want to trade on TASE, you do it through TASE members, like banks or investment houses. They charge their own fees for their services. Banks might charge a higher fee for smaller trades. Investment houses usually charge lower fees than banks.
If you trade a lot of money, you can often get a big discount on fees from both banks and investment houses.
Banks also sometimes charge "custodianship fees." This fee used to be for keeping paper share documents safe. Now that everything is digital, most investment houses don't charge this fee, and banks are starting to waive it for some customers. TASE publishes a table on its website to help compare different trading fees.
Companies Listed on TASE
In the 1960s, only a few companies were listed on TASE. By January 2021, there were 457 companies listed, with a total value of NIS 837 billion.
- Type of Company
- Number of Companies on TASE
- Market Cap in NIS billions
- Banks
- 7
- 107
- Insurance
- 7
- 25
- Financial services
- 24
- 20
- Biomed
- 51
- 92
- Technology
- 89
- 214
- Commerce and services
- 67
- 72
- Real estate and construction
- 87
- 155
- Industry
- 60
- 74
- Investment and holdings
- 37
- 38
- Oil and gas exploration
- 28
- 40
- Total
- 457
- 837
What Are TASE Indices?
Since 2017, TASE has two main groups of shares called "universes." The Rimon universe includes about 230 larger shares that are used for derivatives. The Tamar universe has about 350 shares, including smaller companies.
Main TASE Indices
These indices track the performance of different groups of companies:
- TA-35 Index (formerly MAOF Index)
- This index shows the prices of the 35 largest companies on TASE from the Rimon universe.
- TA-125 Index
- This index represents the share prices of the 125 largest companies on TASE from the Rimon universe. It includes the TA-35 Index and the TA-90 Index.
- TA-125 Fossil Free Index
- This index tracks the 125 largest companies from the Rimon universe, but it leaves out companies involved in fossil fuels.
- TA-90 Index
- This index tracks the 90 largest companies from the Rimon universe that are not in the TA-35 Index.
- A-SME60 Index
- This index tracks 60 companies from the Rimon universe that are smaller than those in the TA-125 Index.
- The TA-Growth (formerly Yeter Rest of Shares and Convertibles Universe Index)
- This index includes all shares from the Tamar universe that are not in the TA-125 Index or TA-SME60 Index.
- TA-AllShare Index (formerly TA Universe Index)
- This index includes all Israeli shares from the Tamar universe. It started in July 2010.
Sector-Specific TASE Indices
These indices focus on companies in specific industries:
- TA-Banks5
- This index includes the five largest banks from the Rimon universe.
- TA-Finance
- This index includes all financial shares (banks, insurance, financial services) in the Tamar universe.
- TA Insurance-Plus Index
- This index, started in April 2011, includes all insurance and financial services shares (but not banks) in the Tamar universe.
- TA-RealEstate Index
- This index includes all real estate shares on TASE from the Tamar universe.
- TA-Construction Index
- This index, started in February 2020, includes all real estate and construction shares from the Tamar universe.
- TA-Investment Properties in Israel Index
- This index, started in February 2020, includes shares of companies that own investment properties in Israel.
- TA-Investment Properties Abroad Index
- This index, started in February 2020, includes shares of companies that own investment properties outside Israel.
- TA-Biomed Index
- This index tracks companies involved in life sciences, biotechnology, medicines, and medical devices.
- TA-Technology
- This index tracks companies in science services, software, internet, electronics, and communication systems.
- TA Global-Blue Tech Index
- This index, started in April 2011, includes all companies from the TA-Technology Index and TA-Biomed Index.
- The TA Tech-Elite Index
- This index, started in May 2014, includes larger companies from the TA Global-BlueTech Index.
- The TA-Cleantech Index
- This index, started in November 2020, includes companies involved in green energy production.
- The TA-Energy Utilities Index
- This index, started in July 2019, includes companies in the energy sector.
- The TA Oil & Gas Index
- This index, started in April 2011, includes companies involved in oil and gas exploration.
- The TA Communications and Information Technology Index
- This index, started in April 2011, includes companies in communications and information technology.
Other TASE Indices
TASE also has indices that focus on specific values or types of bonds:
- TA-Family Index
- This index, started in October 2018, includes Israeli family-owned companies from the Rimon universe.
- Tel-Div Index
- This index, started in July 2006, includes larger companies that consistently pay good dividends.
- TA-Maala Index
- This index, started in February 2005, includes companies that have a special "Maala" rating for being socially responsible.
Tel Bond Indices
These indices track different types of bonds:
- Tel-Bond 20 Index
- This is the main bond index. It includes the 20 largest, highly-rated corporate bonds that are linked to the Consumer Price Index (CPI).
- Tel-Bond 40 Index
- This index includes 40 highly-rated CPI-linked corporate bonds that are not in the Tel-Bond 20 Index.
- Tel-Bond 60 Index
- This index includes all the bonds from both the Tel-Bond 20 and Tel-Bond 40 indices.
- Tel-Bond-CPI Linked Index
- This index includes all highly-rated CPI-linked corporate bonds.
- Tel-Bond Non-Linked Index
- This index includes corporate bonds not linked to the CPI.
- Tel-Bond- CPI-Linked Yeter Index
- This index includes CPI-linked corporate bonds that are not in the Tel-Bond 60 Index.
- Tel-Bond-Yields Index
- This index includes CPI-linked corporate bonds with specific credit ratings.
- Tel Bond-CPI-Linked Banks Index
- This index includes highly-rated CPI-linked corporate bonds issued by banks.
- Tel Bond-Shekel Index
- This index includes highly-rated corporate bonds not linked to the CPI, with fixed interest.
- Tel Bond-Floating Index
- This index includes corporate bonds with interest rates that change (float).
- Tel Bond Shekel-50 Index
- This index includes the corporate bonds of the 50 largest Israeli companies from the Tel Bond-Shekel Index.
- Tel Bond-Dollar Index
- This index includes highly-rated corporate bonds linked to the US dollar.
How TASE is Regulated
TASE follows rules set by the Securities Law of 1968. The Israel Securities Authority (ISA) watches over TASE to make sure it operates fairly and follows the law. Companies that want to be listed on TASE must meet certain requirements, both when they first offer shares and as long as they are listed. These rules are found in the TASE Code, which is updated often.
Dual Listing Rules
In 2000, rules were made easier for companies that are "dual-listed." This means companies that are already listed on another major stock exchange (like NASDAQ, NYSE, or the London Stock Exchange) can also list their shares on TASE more simply. They can use their overseas reports and rules, with fewer Israeli requirements. This makes it easier for international companies to trade on TASE.
Because more Israeli companies want to list in places like Singapore and Hong Kong, the dual-listing rules were expanded in June 2018 to include these stock exchanges, as well as Toronto.
Category:Tel Aviv Stock Exchange
See also
In Spanish: Bolsa de Tel Aviv para niños
