Tel Aviv SE Aims to Target Retail Investors in 2020

JAFFA, Israel – The Tel Aviv Stock Exchange (TASE) aims to target everyday citizens in Israel who are put off by high fees that local banks try to impose.

On Wednesday, Chief Executive Itai Ben-Zeevsaid said that the TASE plans to shift its focus towards retail investors in the coming year, with an aim to attract more ordinary Israelis who have been priced out of the stock market because of the unbearable commissions that local banks are enforcing to their customers.

The Tel Aviv Stock exchange went public in August this year, and according to Ben-Zeev, the bourse has been in a series of talks with several companies in the country in hopes and in looking for ways to expand its reach in retail investing under the exchange. However, Ben-Zeev also stated that it might take some time, around a couple more months, to know who is interested in this new venture.

Ben-Zeev said that the major hurdle when it comes to retail investing is the lack of distribution channels available. He cited that in larger economies such as the US, UK, Australia, and Canada, they have discounted brokers, which according to him, they don’t have in Israel, which is why they want to put a better emphasis on adding more liquidity inequities.

He further stated that there are around $300 billion assets in short-term deposits and bank accounts in Israel sitting around. And while some Israelis are looking towards making trades trough banks, the charge commissions can often be as high as 1%.

In 2019, the TASE has been struggling with delistings as well as the drop is trade volumes. With its 442 traded stocks with a market valuation of around $234 billion, the bourse’s daily trading volume in 2019 is averaged at $300 million per day, which is significantly lower than it’s 2018’s $313 million per day trading volume.

In 2019, there were 80,000 transactions done off the market, which can re roughly valued at $58 billion (200 billion shekels). According to Ben-Zeev, the TASE wants to take that amount of liquidity that was previously off-market and take it into the market in the coming year.

So far in 2019, despite some hurdles, the Tel Aviv index has recorded a 15% advance, while the broader index TA-125 was positive as well with 21% gains. Compared to its profits in 2018, Tel Aviv has gone up by 75%, raising around 12 billion shekels in 2019.

Ben-Zeev further stated that the TASE is hopeful that the 25% long-planned floatation of Israel Aerospace Industries, which is a state-run firm, will take place in 2020. Although it is still waiting for approval from the government, the upcoming offering is predicted to bring around 4 billion shekels.