Surprise Strike Shuts Tel Aviv Stock Exchange for Five Hours

Trading on the Tel Aviv Stock Exchange began five hours late on Tuesday because of surprise labor sanctions by computer operators, according to the exchange spokeswoman.

The usual pre-opening on the TASE is at 9 A.M., the theoretical price start is 9:10 A.M., and the opening auction for most securities starts at 9:45 A.M., Sunday through Thursday.

The mini-strike had not been publicized in advance. Traders were shocked to find themselves unable to access the TASE computer systems Tuesday morning.

One analyst said "tens of millions of shekels have gone up in thin air" due to the strike, adding that foreign investors were "in total shock."

The TASE spokeswoman said that the computer staff of the exchange had been imposing sanctions for weeks, but only this morning did they abandon their stations, preventing trading from opening entirely.

A spokesman for the union representing the TASE workers denies however that the employees imposed any labor sanctions. In fact, he claims the employees are working as usual. The representatives blame the TASE management, particularly CEO Eitan Ben Zeev, for cutting staff and leaving one sole systems operator per shift.

Problems had arisen before, but usually only after trading had closed for the day, says the union spokesman. But this time, Ben Zeev suspended an employee on the night shift, and nobody would replace him.

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As a result, the systems weren't ready to start trading Tuesday morning.

If it was a strike, it was the first the TASE has experienced in 11 years, the last one being in 2008. Market players point out that the stoppage has delayed their reaction to events on Wall Street on Monday.

Livnat Mizrahi-Rinsky of IBI Brokerage Services says one of the biggest problems is delineating the fiasco to foreign investors.

"How do you explain to them that because of three union members, the stock exchange didn't open," she said. "It renders the local capital market into an archaic one controlled by elements that shouldn't be given control – the unions."