What Is the Tel Aviv Stock Exchange (TASE)?
The Tel Aviv Stock Exchange (TASE) is a securities market located in Tel Aviv, Israel. The TASE trades in stocks, convertible securitiescorporate and government bonds, short-term certificates, and a variety of derivatives. It plays a primary role in the growth and development of Israel’s economy.
- The Tel Aviv Stock Exchange (TASE) is a securities market located in Tel Aviv, Israel.
- The TASE trades in stocks, convertible securities, corporate and government bonds, short-term certificates, and derivatives.
- As of 2019, the Tel Aviv Stock Exchange has 442 listed companies that generated a daily turnover of $365 million.
Understanding the Tel Aviv Stock Exchange (TASE)
TASE is the only exchange in Israel, in which Israeli companies and the government rely on for capital and liquidity. TASE serves as the go-to exchange for hundreds of thousands of investors, including Israeli households. Many of the investments are facilitated through investment management companies, insurance companies, and pension funds.
TASE provides trading for many types of investments that include equitiessecurities, and derivative instruments. Derivatives obtain their value from an underlying security such as a stock. The TASE offers stock optionswhich give the holders, the right but not the obligation, to buy or sell specific stocks at a price and by a specific date—called the option’s expiry.
Exchange traded funds (ETFs), futures contracts on stocks and foreign currencies are also offered. Bonds are also traded on the Tel Aviv Stock Exchange, which includes corporate bonds, government bonds, and U.S. Treasury bills.
Inside the Tel Aviv Stock Exchange (TASE)
Members of the Tel Aviv Stock Exchange include some well-known investment management providers and banks:
- Bank of Israel
- Bank of Jerusalem Ltd.
- Barclays Bank PLC
- Citibank, N.A.
- HSBC Bank PLC
- Flow Traders B.V.
- Jefferies LLC
- Merrill Lynch International
As of 2019, the Tel Aviv Stock Exchange had 442 listed companies that generated a daily turnover of $365 million. Daily turnover represents the value of stocks traded over a certain period. Of its members, $4.5 billion in new capital was raised in 2019. Dollar-denominated options contracts totaled more than 43,000 with an underlying asset value of $105 billion for the year.
TASE IPO and Ownership
In August 2019, the Tel Aviv Stock Exchange became a TASE traded public company, following its initial public offering (IPO)which is an equity share issuance. The shares trade under the ticker symbol TASE. The Tel Aviv Stock Exchange has wholly-owned subsidiaries that include the Tel Aviv Stock Exchange Clearing House, the MAOF Clearing House (derivatives), and the Tel Aviv Stock Exchange Nominee Company. Together, TASE and its subsidiaries are responsible for clearing and settlement, as well as securities registration, throughout Israel.
Trading the TASE
The TASE is open Sunday through Thursday to allow a slight overlap with U.S. market hours. Trading is fully automated with a real-time, order-driven, system, which is called the Tel Aviv Continuous Trading “TACT” system.
Its regulatory body is the Israel Securities Authority (ISA), and its subsidiaries include the TASE Clearing House (established 1966), the Maof Clearing House (established 1993), and the Nominee Company (established 2018).
History of the Tel Aviv Stock Exchange (TASE)
In the 1930s, following the immigration of Jewish bankers who fled Nazi Germany, securities trading began in Palestine. The Exchange Bureau for Securities was established in 1935 in a branch of the British Anglo-Palestine Bank before Israel was a state. This small exchange-traded stocks for only an hour each day. After Israel became a state in 1948, its securities market became formalized in 1953 as the Tel Aviv Stock Exchange (TASE). Trading continued at the bank’s offices until 1960 when the stock exchange moved to a more permanent residence where it remained until 1983.
Trading volumes significantly increased in the late 1970s and early 1980s, and in 1982 the TASE had a record year with stock prices that rose by 113%. However, in 1983, the stock boom ended in a crash and Israel’s bank stock bubble burst. Following the crash, the TASE closed for two weeks.
TASE’s major index since 1992 has been the TA-25, a capitalization-weighted index of the exchange’s largest 25 stocks. The TASE has used a fully electronic trading system for all trades since 1999. Dual listing began in 2000, as did the issuance of exchange-traded notes (ETNs). The TASE moved to a new location at Ahuzat Bayit Street in 2014 where it resides today.