The global financial crisis that started in the second half of 2007 and became more severe in Sep.-Dec. 2008 continued to cast its shadow in 2009. Trading on exchanges throughout the world was characterized by high volatility but Tel-Aviv Stock Exchange (TASE) shares recorded significant gains. In August TASE saw its first equity IPO in eighteen months. Foreign financial investors injected $0.9 billion to TASE.
Prices of corporate bonds, which had declined in the closing four months of 2008, staged a comeback as well during the period under review. In the corporate bond market mainly banks and a number of large companies raised capital in public offerings and private placements to institutional investors.
TA-25 and International indices – 1-9/2009
In USD terms
Equity Market
The TA-25 share price index rose 54% over the first nine months of 2009 and some 80% since its lowest point on 23 November 2008, passing the level recorded on the eve of the collapse of Lehman Bros. In contrast to the performance of the TASE, the key share price indices of leading exchanges abroad raised by max. 42% during Jan.-Sep. 2009, following plunging prices in January and February.
Sharp price increases, ranging between 75% and 130% marked most of TASE’s other leading indices, including the Nadlan-15 real estate index, the Tel-tech 15 index of hi-tech shares and the Yeter 120 index of small-cap shares, which suffered extreme price declines ranging between 65%-80% in 2008. The TA Finance-15 index of financial services shares, which fell 6% in the first quarter following the announcement of Q4 losses as well as negative developments in the banking industry abroad, recovered in April-September with a dramatic 110% increase.
Average daily turnover of TASE for the first quarter of 2009 came to US$ 300 million, but from the second quarter it rose to an annual average of US$ 414 million-some 24% lower than last year’s average.
Activity on the derivatives market slowed in comparison to 2008, with average daily turnover coming to 260 thousand contracts as opposed to 330 thousand last year.
The Equity Market - Prices and Volumes (2003–9/2009)
In August TASE saw its first equity IPO in eighteen months, with the public offering of a biotech company- D-Pharm.
In September Ness Technologies which is listed on NASDAQ joined the group of companies traded simultaneously in Israel and abroad. Today 55 companies are cross-listed on the TASE and foreign securities exchanges.
Foreign investors increased equity investments during Jan.-Aug. 2009 by an additional $0.9 billion, after a $2.8 billion that were sold in the second half of 2008.
This year TASE launched trading in options on individual shares, with Israel Chemicals, Bank Hapoalim, Bank Leumi and Teva Pharmaceutical Industries being the first companies to have exchange-traded stock options written on their shares.
Fixed Income Market
TASE has a very developed fixed income market that includes 40 series of government bonds and 500 series of non-government bonds. Most of the bonds are indexed (CPI) and others are non-indexed.
Corporate debt was the asset class on TASE hardest hit by the financial crisis. Corporate bonds experienced precipitous price declines in the closing four months of 2008. In 2009 Prices began to recover and sharply rose.
The index of CPI-linked corporate bonds gained 37% during Jan.-Sep. 2009, after a 16% decline in 2008. In contrast, prices of non-linked "Shahar" government bonds, which stood out in 2008 with a 14% increase, raised only 4% since the beginning of 2009.
Trading on the bond market continued to be active with average daily turnover coming to US$ 1.1 billion – similar to 2008 record volumes.
Israel’s private sector raised US$ 7 billion debt financing through public offerings and private placements to institutional investors, compared with $6.6 billion in all 2008, undertaken by large non-financial companies with high credit ratings and commercial banks.
