Increase of 40% in the Trading Volumes of the Dual-Listed Shares on The Tel Aviv Stock Exchange (TASE)

 

Increase in the portion of the Trading on TASE from the Total Trading Volumes of the Shares in Israel and Abroad

As international markets experience price drops, the Israeli market serves as a significant anchor for the dual-listed companies

TEL AVIV, Israel, June 1, 2022 /PRNewswire/ -- According to Yuval Tsuk, Research Unit at the Tel Aviv Stock Exchange (TASE: TASE), The dual-listed companies, which are simultaneously traded on TASE and on international exchanges, have a material effect on the Israeli equity market, in general, and on the flagship indices, in particular. 50 dual-listed companies are currently traded on TASE, most of which are simultaneously traded in the United States.

The TA-35 Index includes 10 dual shares, which accounted for 40% of the weight of the index at the end of March 2022, and the trading in which represented 35% of the total trading in all shares of the index in the first quarter of 2022. The TA-125 Index includes 21 dual shares, which accounted for 33% of the weight of the index, and the trading in which represented 27% of the total trading in all shares of the index.

Dual listing offers many benefits to the companies, the investors and the Israeli economy. Among others, Israeli and international investors can concurrently trade in both markets and generate greater liquidity than that afforded by a single market, the more diversified mix of investors facilitates capital raising on both markets, and the trading hours are longer. In addition, inclusion in TASE's leading indices and investments by ETFs and tracking funds on those indices also contribute to more expansive volumes of investment and trading.

Dual listing also benefits the Israeli economy as a whole, as the increase in the volumes of investment and trading in the dual companies also reflects on the volumes of investment and trading in Israeli high-tech companies, both listed and private, that initially only have access to the Israeli exchange. The dependence on the U.S. capital market is problematic. When international markets plummet, foreign investors prefer to invest in their country's local companies, which reduces their exposure to the Israeli companies.

The dual listed companies are mostly mid- to large cap companies in local terms and are household names in Israel. However, overseas, the companies are considered to be small cap, are less familiar and usually are not included in the leading indices abroad. In addition to the "home-bias" advantage, these companies enjoy lower volatility on TASE compared to abroad during upheavals or when they undergo their own material event.

In the first quarter of 2022, the trading volume of dual-listed shares on TASE rose by an impressive 38%, reaching a daily NIS 473 million, compared to an average daily trading volume of NIS 343 million in 2021. The trading volume of the dual-listed shares accounted for 25% of the total average trading volume of shares on TASE.

Since the dual-listed shares are simultaneously traded on two markets, in Israel and abroad, we examined the contribution of the trading volumes on TASE to the dual-listed companies, compared to their trading abroad.

The overall trading in the dual-listed shares⁽¹⁾ on TASE totaled a daily US$ 147 million in the first quarter of 2022 - an  increase of 40% compared to 2021 (in dollar terms).

The overall trading in the dual-listed shares abroad totaled a daily US$ 402 million in the first quarter of 2022 - a 11% decrease compared to 2021.

The portion of the trading on TASE this quarter from the total trading volume in Israel and abroad is 27%, a significant increase compared to 19% in 2021.

For most dual-listed shares that experienced a rise in trading volumes in the first quarter of 2022 compared to 2021, the trading volume on TASE rose more sharply than the trading volume abroad.

However, for most dual-listed shares that experienced a downturn in trading volumes in the first quarter of 2022, the reduction in the trading volume was more moderate on TASE.

The data show that when international markets experience price drops, the Israeli market serves as a significant anchor for the dual-listed companies.

 

		Change in trading volume in Q1-2022 compared to full year 2021
Trading volume on TASE out of total trading in Israel and abroad (Q1-2022)	Number of shares	TASE	Abroad
More than 75%	6	2%+	63%-
50%-75%	6	103%+	163%+
25%-50%	13	22%+	19%-
0%-25%	22	24%+	12%-
Total	47	40%+	11%-

 

(1)  The trading volumes of the 47 dual-listed shares that are traded on TASE at the end of March 2022, excluding the foreign shares that are not Israeli-oriented (Pennantpark, Creative Media and UMH).

 

Trading volume on TASE accounting for more than 75% of trading in Israel and abroad

For six of the companies, the trading volume on TASE accounts for more than 75% of the total trading in Israel and abroad in the first quarter of 2022, the largest and most liquid of which are Partner (97% on TASE) and Formula Systems (76%).

For Icecure Medical, which was listed on Nasdaq in August 2021, the trading volumes on TASE constituted 84% in the first quarter of 2022.

Trading volume on TASE accounting for 50%-75% of trading in Israel and abroad

The largest and most liquid of the six companies in this category are ICL (74%), Elbit Systems (56%), and Kenon Holdings (73%). It should be noted that the volume of trading in the ICL share rose by 117% in the first quarter of 2022 compared to the average trading volume in 2021, but in the United States it surged by 518%, reducing the share of the trading on TASE from 89% in 2021 to 74% in the first quarter of 2022. Similarly, a sharp rise of 207% in the trading volume of Kenon Holdings on TASE, compared to 748% soar in the United States, reduced the share of the trading on TASE from 88% in 2021 to 73% in the first quarter of 2022.

Trading volume on TASE accounting for 25%-50% of trading in Israel and abroad

For 13 companies, the trading on TASE represented 25%-50% of the total trading in Israel and abroad, most notably Nice, whose trading volume on TASE rose by 33% in the first quarter of 2022 compared to 2021, while in the United States its average trading volume decreased by 2%, raising the share of the trading on TASE in the overall trading from 20% to 25%.

Trading volume on TASE accounting for up to 25% of trading in Israel and abroad

The number of companies for which the trading on TASE out of the total trading in Israel and abroad was less than 25% is 22, including Teva, whose average trading volume increased by 16% on TASE but decreased by 19% in the United States, raising the share of its trading on TASE to 17%; Tower, whose average trading volume on TASE tripled in the first quarter of 2022 compared to 2021, but grew five times larger in the United States, reducing the share of the trading on TASE from 31% in 2021 to 20% in the first quarter of 2022; Ormat Technologies, with a trading volume of 18% on TASE in the first quarter of 2022, an increase from the 14% in 2021, following an 8% reduction in the average trading volume on TASE compared to a 30% reduction in the United States.

Contact:
Orna Goren
Head of Communication and Public Relations Unit
Tel: +972 76 8160405
tase.ir@tase.co.il

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SOURCE The Tel Aviv Stock Exchange Ltd.