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In the first two weeks of the year with the new tax regime in place, there has already been a noticeable fall-off in trade on the Tel Aviv Stock Exchange, in year-on-year comparison, in comparison with the previous month or with 2002 in general. At this early stage, the TASE is not keen to reach specific conclusions, but one can only recall TASE director Sam Bronfeld's warning that the introduction of the tax on share transactions would hit the exchange hard.

Average daily trade in the first week and a half of 2003 was NIS 146 million, compared to a daily average of NIS 343 million in December 2002, or NIS 242 million in January 2002. Trade in Maof options in the past two weeks has been around 40 percent lower, while volume of shekel/dollar options has dropped 30 percent.

Shmuel Frenkel of the Federation of Israel Chamber of Commerce said that this was expected. He contends that the exchange had been weak in any case, and that this should have been addressed before new taxes were introduced. "But they did exactly the opposite, just to grab the headlines," he complains.