BlackRock Launches Fund for European Investment in Tel Aviv Stocks

The world's largest money manager says its iShares TA-25 Israel ETF is the first that trades the underlying shares of the 25 largest shares on TASE.

BlackRock Financial Management Inc. chief executive officer Laurence Fink gestures as he speaks during a panel session during the World Economic Forum, Davos, Switzerland, January 20, 2016.

REUTERS - BlackRock, the world's largest money manager, said on Wednesday it had launched an exchange-traded fund for European investors to invest directly in Israel's blue-chip share index, the Tel Aviv 25.

It said its iShares TA-25 Israel ETF is the first that trades the underlying shares of the 25 largest shares on the Tel Aviv Stock Exchange. iShares now has more than seventy single country ETFs domiciled in Europe.

"Israel's equity market was one of the fastest developed economies to rebound after the financial crisis, and our fund is a cost-effective way to invest in this resilient market and one of the world's leading technology centers," said Alex Pollak, head of BlackRock in Israel.

The London Stock Exchange said the iShares TA-25 ETF would be listed on the stock exchange, becoming the first Israeli ETF to list in London.

It will be traded in pounds and dollars and will have an international settlement structure with Euroclear Bank.

The ETF's listing "is a significant achievement for London Stock Exchange and for investors, allowing them the opportunity to have direct exposure to Israel’s dynamic, fast growing and entrepreneurial economy," said Gillian Walmsley, head of the LSE's fixed income and listed products.

Israel's stock exchange, which is in the process of demutualization, has struggled in recent years with low volumes and the problem of companies delisting. Turnover improved to 1.4 billion shekels ($352 million) a day in 2015 from 1.2 billion in 2014 but that was below an average of 2 billion a day in 2010.

"This unique collaboration will increase TASE's exposure to international investors, who are seeking ways to invest in the Israeli market," said Yossi Beinart, TASE's chief executive.

"We will continue to promote partnerships with leading international financial institutions, develop new products and be responsive to local and global market needs," he said.

Earlier this month, TASE and Nasdaq said they would jointly create a private market in Tel Aviv to support small growth companies in Israel.