Tel Aviv’s Sunday Trading Faces Elimination in MSCI Push

The Tel Aviv Stock Exchange may end Sunday trading to align with market practices abroad as part of a larger campaign to win Israel’s inclusion in MSCI Inc.’s Europe Index, a board member on the exchange said.

The TASE is considering the change in response to feedback from MSCI, which has said the exchange’s Sunday-to-Thursday trading schedule was a hurdle, according to Julien Assous, chief executive officer of Israel Brokerage & Investments and a member of the bourse’s board of directors.

Yossi Beinart, who took over as the exchange’s chief executive officer this year, is seeking ways to lure back foreign investors to Israel’s $310 billion stock market after MSCI raised it to developed status in 2010. The move triggered a decline in trading volumes on Israel’s only stock exchange.

“If one of the obstacles to us becoming part of the MSCI Europe was us trading on Sunday, hopefully this will take away one of the obstacles,” Assous said by phone from Tel Aviv yesterday. “There are many issues, but being a part of a major MSCI index is the big issue.”

The TASE board endorsed the idea of moving trading to a Monday-through-Friday schedule, the bourse said in an e-mailed statement yesterday. A TASE spokeswoman confirmed that Beinart is seeking to meet with MSCI representatives in October.

Christian Pickel, a spokesman for MSCI, declined to comment on Israel’s possible inclusion in the European index.

MSCI, whose gauges are tracked by investors managing about $9 trillion, rejected Israel’s bid to be included in its Europe Index in June 2013. Then-TASE CEO Ester Levanon said at the time the move would bring as much as $2 billion of foreign capital.

Trading Volume

Israel’s weighting dropped to 0.2 percent on the MSCI World Index from 2.7 percent on the gauge for developing nations, data compiled by Bloomberg show. Average daily trading volume has dropped by a third since 2010, and plunged to a five-year low of 955 million shekels ($267 million) in April, according to data compiled by Bloomberg.

Four companies have joined the exchange this year compared with a record 56 in 2007. To boost volumes and spur listings, the Tel Aviv exchange is amending rules to allow trading of local companies listed abroad, and boosting efforts to attract smaller businesses, Beinart said in an interview May 12.

The exchange may also create a gauge that will include Israeli technology stocks listed at home and abroad, while a government panel has recommended tax breaks and cutting red tape to lure high-tech startups.

‘Comprehensive Package’

“The change in the trading schedule will be fairly simple to implement and doable,” Itzik Kabesa, a vice president of marketing at Halman-Aldubi Investment House, which manages 14 billion shekels in assets, said in a phone interview today. “Taken alone it will most probably not be enough to deal with the drop in volumes. It has to be part of a comprehensive package which includes an increase in the supply of companies that are traded on the local exchange.”

The benchmark TA-25 index rose 0.4 percent to 1,388.93 in Tel Aviv today, pushing its advance this year to 4.5 percent. The Bloomberg Israel-US Equity index climbed 1.7 percent to 121.44 in New York, extending its gain this year to 9.2 percent.

(A previous version of this story was corrected after the Tel Aviv Stock Exchange clarified comments in fourth paragraph to show that meetings with MSCI representatives aren’t definite.)

To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Marie-France Han

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