Tel Aviv Stock Exchange to Shift Trading Hours in Bid to Attract More Overseas Business

Move projected to take place beginning of April.

The Tel Aviv Stock Exchange said Thursday that its board has approved a plan to extend its daily trading session by nearly an hour to overlap more with stock and bond trading hours in Europe and the United States, and attract more foreign investors.

The TASE plans to end the sessions on Monday through Thursday at 5:30 P.M., instead of the current 4:30 P.M curfew. Trading on Sundays will be shortened to end at 2:30 P.M., and the start of trading will be pushed back to 10 A.M., from 9:45 A.M.

Last year, the average daily stock trading volume on TASE declined to NIS 1.1 billion, which was just 55% of the average trading volume in the course of a day’s trading in 2010. New corporate funding through bond issues has also been on the decline.

“The changes decided by the board are expected to contribute to an increase in the turnover of shares, to growth in activity by foreign and local arbitrage players, to improve the liquidity of shares included in the main indexes in general, and in dual-listed stocks in particular, and making the market more attractive to foreign investors,” TASE said in a statement.

However, several capital market sources expressed displeasure at the proposed shift. “Instead of looking into the real causes of low trading volumes, they are using a method that has not worked in the past and will increase our operating expenses,” said Idan Azoulay, the CEO of Epsilon Mutual Funds.

No date has been set for the change since the plan still needs the approval of the Israel Securities Authority, but TASE is aiming for the first half of April. In 2009, TASE shortened its trading day by an hour, to 4:30 P.M.

Chairwoman Ester Levanon had already said in December that the bourse was looking to extend its trading day to attract more European investors and boost volumes. The bourse said it had studied the changes in volume for periods of trading where there was some overlap with Europe and the United States − in March and October 2012, when Daylight Saving Time did not coincide with the periods in effect in European countries and the United States. Last March, stock turnover rose by 15%, while turnover jumped by more than 30% in October, TASE said. There was no change in bond market trading volumes.

The later ending time for trading would not apply to corporate or short-term government bonds. In practice, the shift would extend the trading week for shares and derivatives by 45 minutes, but shorten trading hours for corporate bonds and makams ‏(short-term treasury bills‏) by four hours.

Reuters