The weight of technology companies in the Tel Aviv-35 index * rose from 15% in 2017 to 27% today
Industry distribution of shares of the Tel Aviv-35 Index at the time of its launch in 2017 and today:
In February 2017, as part of the reform of the stock indices introduced by the TASE, the TA-25 flag index was expanded, 10 shares were added to it, and since then the TASE’s main flag index has been the TA-35 index.
The objectives of the reform were, inter alia, to reduce the concentration of stock indices and to increase the proportion of public holdings in shares listed for trading.
As part of the reform, in the share included in the TA-35 index, the minimum public holdings rate was gradually raised from 25% to 30%, the value of the required public holdings was increased to NIS 1 billion and the maximum weight limit was reduced from 10% to 7%.
As a result, in the two years following the launch of the reform, the stakeholders sold shares worth billions of shekels to the public, in order to meet the new requirements and prevent companies from being deducted from the index.
Today, 4 years after the launch of the index, the index has changed its face and it better represents the Israeli economy.
An analysis of the composition of the index after the update of the current index, which will take effect on February 7, 2021, shows that the significant change in the index is reflected in a reversal in its industry composition: the weight of technology companies included in the index rose from 15% in 2017 9 companies. This trend is in line with the global trend of the huge technology companies that have replaced in the leading indices the traditional economy companies.
On the other hand, the weight of biomed companies, which was about 26% 4 years ago, has dropped to about 15% today, and the energy and oil and gas exploration companies that made up 8% of the index now constitute only about 2% of the index.
Of the 35 shares that were included in the index when it was launched in February 2017, only 22 shares remain in it today.
Since its launch 4 years ago, 13 companies have joined the index, replacing 10 companies that were deducted from it and another 3 shares that were delisted from trading on the stock exchange.
Of the 10 companies that were added to the index when it expanded in February 2017, only half remain in it today.
List of companies
On the eve of the expansion of the Tel Aviv-25 index, it included 5 banks, 5 energy and oil and gas exploration companies, 4 biomed companies, 3 technology companies and 3 income-producing real estate companies.
With its expansion, 4 income-producing real estate companies and 2 communications companies were added to the index, among others.
Of the 35 shares that were included in the index when it was launched in February 2017, 22 shares remain today:
- The 5 largest banks – Poalim, Leumi, Mizrahi, Discount and International.
- 5 income-producing real estate companies in Israel – Aloni Hetz, Amot, Airport City, Melisron and Azrieli.
- 4 technology companies – Elbit Systems, Tower, Ormat and NICE.
- 3 Biomed companies – Teva, Ofko and Perigo.
- 2 industrial companies – ECL and Strauss.
- 3 companies from various industries – the Israel Corporation, Bezeq and Harel.
The index currently includes 13 companies that were not included in its launch at the time of its launch:
- 4 technology companies – LivePerson, Mitronics, Nova and Sapphire, most of which joined the index in an update released in August 2020 – at the height of the Corona crisis.
- 3 real estate and construction companies – Mivna, Shikun VeBinui and the Ashtrom Group, which joined the index in this week’s update.
- 2 energy companies – Energian and OPC. Which joined the index in this week’s update.
- 4 companies from various industries – Electra, Phoenix, Shufersal and Shafir.
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*See also Yaniv Pagot, “The Tel Aviv-35 Index is Well Positioned for the Day After the Corona,” TASE Blog, January 2021
The 13 companies that have been deducted from the index since its launch 4 years ago were:
- 6 energy and oil and gas exploration companies – in Zen, Delek Group, and Delek Drilling – that were deducted from the index due to the Corona crisis in 8/2020; Petroleum) 2/2020), Isramco (8/2019) as well as Avner (poured in drilling fuel).
- 2 Communications companies – Cellcom and Partner, which were discontinued on 8/2018 following the crisis in the communications companies.
- 2 income-producing real estate companies – Big and Gazit Globe.
Also deducted from the index were three companies delisted from the stock exchange – Sodastream and Frutarom, which were merged with international groups, and the dual Mylan, which was delisted only from the Tel Aviv Stock Exchange.
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