ISRAEL
THE TEL AVIV
STOCK EXCHANGE By Mordecai Beck
The TASE offers investors the best way to buy into Israel’s growing economy
24 | Spring/Summer 2012/5772 | EMUNAH Magazine | emunah.org
A
mazing as it seems, local trade in securities began well before there was a State of Israel. In the 1930s, trade was carried out through the Exchange Bureau for Securities, founded by the Anglo-Palestine Bank (which became Bank Leumi Le-Israel) in 1935. With the formation of the State in l948, a pressing need arose to formalize trade in securities and in September l953, a number of banks and brokerage houses joined forces and established the Tel Aviv Stock Exchange. It was set up by the Treasury which examines all the deals and investments that come through the Exchange. The TASE is an efficient one-stop shop for the securities industry, hosting a range of products available to investors, including shares, corporate bonds, treasury bills and bonds, index-tracking products and derivatives. Located in downtown Tel Aviv, the TASE is meant to be the place to which companies or governments can turn to receive monies as an investment. Its stated objectives are to provide state-of-the-art trading and clearing platforms to facilitate corporate capital raising, to give the public the opportunity to invest and trade in securities for low costs, to promote foreign investment, to trade in duallylisted Israeli securities, to promote investors’ confidence through transparency and market integrity and to provide a platform on which the government privatizes stateowned enterprises. The TASE offers investors the best way to buy into Israel’s growing economy. Unlike developed economies in the West, Israel did not suffer a collapsed housing market and recession after 2008. That success story has received growing recognition and, in fact, Israel became a member of the Organization for Economic Cooperation and Development (OECD) in 2010, a major step in opening up markets in the European Union. Analyst and author David Rosenberg noted that this was a great advance from the situation about ten or fifteen years ago when no one wanted to trade with Israel. “The second Lebanese War impressed people; they thought Israel could be relied on. The result was that TASE became more attractive to potential investors. Moreover, because it was cautious, it did not ‘securitize’ as they did in other countries. There were no mortgage-backed securities of the kind that backfired in the USA,” he said. The TASE is a private company owned by its members (of which there are about 600), both banks and non-banking corporations, though anybody may trade in the securities listed on the Exchange. It acts as a sort of non-governmental organization (NGO) and is, therefore, different from most other exchanges. The possibility of conflict of interest