The difference in trading days is the main reason for the decision that will prevent billions of investments in the Israeli stock exchange • Daniel Shebeks, director of the finance division at Hirschowitz Solutions, estimates:
The index company MSCI officially announced tonight its decision not to include Israel in the MSCI Europe index for the time being, on the grounds that an in-depth examination for several months revealed that Israel does not meet the index’s expectations.
One of the main reasons for the decision to keep Israel out of the MSCI Europe index is the fact that the Israeli Sabbath day is not the same as in other countries, as are trading days (in Israel trading takes place on Sundays while in Europe it does not, and on Fridays).
This is a dramatic decision for trading on the Israeli stock exchange, since Israel’s joining the MSCI Europe index was supposed to generate high demand for Israeli shares and increase the volume of trading in a home estate.
Many analysts attributed Israel’s excess performance at the end of 2021 to the examination of Israel’s entry into the MSCI index, since the stock market is always ahead and everything is going according to expectations, so increases have already been recorded in advance. This morning, with the decision made, the stock market reacted accordingly and trading in Tel Aviv began sharp declines.
Daniel Shebeks, director of the finance division at Hirschowitz Solutions, notes that “entering the index should have led to technical demand of close to NIS 2 billion, and also put the local market in the focus of investment managers around the world, resulting in more money on the Tel Aviv Stock Exchange. “.
He said, “Apart from the fact that now fewer investors we dreamed of coming to invest in Israel will actually come, it will increase the exposure and exit of investors in the country abroad.”
However, Bex does not believe that the negative trend in the stock market will continue over time. “In my opinion, the decision will not hurt in the long run and the market will straighten out very soon.”