What to Know About The Tel Aviv Stock Exchange (TASE)
Israel occupies a complex position in the Middle East, as the sole Western-style democracy with a modern economy in the region. Enduring external conflicts are juxtaposed against considerable internal stability and reliability that has always attracted foreign investment in Israeli stocks. Bilateral cooperation has helped the small nation of Israel become a considerable presence in the world of finance and investment.
Despite being far less populous than nations like Turkey and Saudi Arabia, and lacking the oil wealth of the UAE, Israel is the fourth largest economy in the Middle East. It hosts a dynamic and growing financial sector, with meaningful participation in Israel's stock markets.
Israeli Financial Markets
For much of Israel's modern history, financial markets were largely controlled by the government.
While this wasn't the case at first, a 1983 economic crisis prompted the nationalization of most Israeli banks by the government. It's interesting that while the US and UK were leading a path of deregulation and reduced government involvement in the economy at the time, this close ally was doing the exact opposite.
However, the Israeli government has sold off much of its stake in financial institutions and gone through several rounds of regulation and deregulation since. While the 2008 financial crash saw the nation tighten regulations on its financial systems, the nation has once again begun reducing barriers to engaging in the financial markets. This has generated considerable growth in the Israeli financial space and increased foreign interest in something-of-a-renaissance for the Tel Aviv Stock Exchange (TASE).
What is the Tel Aviv Stock Exchange (TASE)?
Israel only has one major stock exchange, the Tel Aviv Stock Exchange (TASE). It's had a somewhat tumultuous history with roots in Zionist migration, informal participation between varied banks, and various government interventions. Today, 23 financial institutions operate TASE as members under the supervision of the Israeli Securities Authority (ISA) to provide stocks, bonds, and other financial products to Israeli citizens and foreign investors alike.
TASE has three main markets, with an equities market worth more than US$200 billion and a bond market worth over US$200 billion.
In 2020, equity raised on the TASE topped US$5 billion, an impressive 46% increase over the previous year. Clearly interest is gaining.
Over 450 companies are listed on the TASE, 52 of which are dual-listed on other exchanges, and over 500 Israeli ETFS currently trade on the exchange with a total market cap of US$28 billion.
27 IPOs kicked off in 2020, the most since 2007.
It's also worth noting that TASE has an active derivatives market, and you can access most common financial assets on the TASE, such as:
- Government bonds
- Private bonds
- Local and foreign ETFs
- Mutual Funds
When Does The TASE Open?
Israel operates on Israel Standard and Daylight Time (commences during the spring), or UTC+2.
The Tel Aviv Stock Exchange is open:
- Sunday, 9:59am to 3:39pm
- Monday to Thursday, 9:59am to 5:14pm
The TASE closes for most major Jewish holidays, including:
- Passover 1
- Passover II Eve
- Memorial Day
- Independence Day
- Pentecost Eve (Shavuot) and Pentecost
- Fast Day
- Jewish New Year Eve and two days of the New Year
- Yom Kippur Eve and Yom Kippur
- Feast of the Tabernacles Eve and Feast of the Tabernacles day (Sukkoth)
- Rejoicing of the Law (Simchat Tora) Eve and Rejoicing of the Law day
Which Index Tracks the TASE?
“Is the TASE up or down?”
Much like the DOW or S&P 500 in the U.S., TASE’s TA-125 Index and TA-35 are TASE's most significant and widely watched indexes as a barometer for the Israeli markets generally.
The TA-125 includes 125 of the top companies on the TASE by market capitalization, and financial instruments (ETFs, mutual funds) tied to the TA-125 are the most popular Israeli funds globally. The TA-125 started out as the TA-100 but was broadened in February of 2017. The TA-35 likewise includes 35 of the largest companies on the TASE by market cap.
The History of the Israeli Stock Exchange TASE
The beginning of the Israeli stock exchange lies in the 1930s, as Jewish migrants from Germany saw the potential in opening trading in what was then British Palestine. At first, this informal Exchange Bureau of Securities was simply the office of Mordechai Pinchas Hasson, a banker who handled trading for one hour each working day. Operations grew continually as the exchange reached major achievements, such as officially becoming the Tel Aviv Stock Exchange in 1953 and upgrading to a dedicated premises in 1960. TASE operated as an independent financial institution for 15 years before the government finally instituted regulatory oversights in 1968.
From there, it was business as usual until the 1983 banking crisis devastated four of Israel's leading banks, each of which was a member of TASE. The public suffered terrible losses in bank holdings, with an average of one-third of all money invested in these banks vanishing.
As a result, the Israeli government nationalized the four banks that failed to stabilize the market. Over time, the Israeli government gradually reduced its presence in the financial industry and caught up with deregulatory trends around the turn of the century.
Dual listing on Israeli and US exchanges became accessible via Amendment No. 21 in 2000, and more exchanges for dual-listing were added in 2005. The Tel Aviv Stock Exchange reached new peaks around that time, however losses during the 2008 financial crisis combined with strict regulations that followed decimated TASE and reduced the volume of securities and convertibles trading by more than half.
In 2012, the annual trading volume fell to a low of less than $80 billion.
Comprehensive reforms in 2017 aimed to strengthen and stabilize regulations on the largest indices while reducing requirements for smaller companies. Combined with the strong growth of the Israeli economy, these measures have helped to produce historic growth for TASE.
Today, the TASE accommodates over US$540 million in trading volume daily for equities, and over $1.2 billion in the bond market.
Members of TASE
TASE's members include commercial banks, foreign banks, remote members and investment houses from Israel and abroad. The first member of TASE is the Israel Central Bank, while the other 22 are:
Remote TASE Members:
- Merrill Lynch International
- Flow Traders B.V
Foreign Banks and Investment Houses:
- Barclays Bank PLC (UK)
- Citibank, N.A. (USA)
- HSBC Bank PLC (UK)
- UBS Securities (Switzerland)
- Citigroup Financial Products Israel (UK)
Israeli Banks and Investment Houses as TASE Members:
- 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.
- Excellence Nessuah Brokerage
- Psagot Securities
- Meitav Dash Trade
- Israel Brokerage and Investments IBI
- Excellence Investments Management and Securities Ltd
Notable Facts About the Tel Aviv Stock Exchange
The Tel Aviv Stock Exchange plays a tremendous role in the wider Israeli economy. Here are multiple interesting facts, statistics, and investing rules regarding the exchange:
When someone asks about the size of the Tel Aviv Stock Exchange, they usually mean number of listings, daily trading volume, or market cap. However, the physical layout of TASE is noteworthy in that it's a 14 story building with a height of 60m. This is because the ceilings are unusually tall, particularly the 10m tall ground floor.
No Direct Investing
While some stock exchanges allow individuals to trade directly on the stock market, this is currently not allowed on the Tel Aviv Stock Exchange. While anyone can invest in the Israeli stock market, citizens and foreigners alike must do so with a TASE member acting as an intermediary. This group of members includes 23 banks and other financial institutions, such as investment houses and remote members.
Third Largest Exchange in the Middle East
With a combined market cap of more than $450 billion between the indices and bonds markets, TASE has a higher market cap than almost all other Middle Eastern stock exchanges. Only Saudi Arabia's Tawadul and NASDAQ Dubai exceed TASE in terms of market cap, but it's also noteworthy that their advantage stems largely from the oil wealth of both of those nations.
Rising Tech Sector
In recent years, Israel's growing tech industry and financial deregulatory trends have both been a boon for the economy. Naturally, they've also resulted in several new tech-oriented listings on the Tel Aviv Stock Exchange.
Can I Borrow Against My TASE Stocks?
At Get A Stock Loan, we can help you borrow against securities globally, and the TASE is no exception. We lend for stock in Israel, with closing delivered in the denomination of your choice. We do crypto too.
Click here to learn more about non-recourse stock loans.