The Tel Aviv Stock Exchange sums up the year 2021, which ends in the coming days as a record year, which is reflected in double-digit jumps in the leading indices, in parallel with sharp rises in most debt channels, along with an unprecedented wave of initial public offerings (IPOs) and high trading volumes. .
Buds for these trends were already evident in the sum of 2020, a year that opened in a positive direction that soon turned into a collapse in indices and activity due to the spread of the corona virus, and ended in a handsome recovery.
As explained by the stock exchange, behind the positive direction of activity were several supportive factors at the local level, including taking control of the corona virus in the country, leading to the vaccine and expanding it to the young population, continuing government support and forming a new government, continuing Bank of Israel support and a high credit rating to Israel.
All this while in the background also the global economic environment provides support for the performance of the world stock exchanges, with the low interest rate environment, support and budgetary assistance from governments, in which the US aid program stands out, central bank support in continuing with bond purchases and advancing vaccine activity to Corona.
These are some of the outstanding data presented by the Tel Aviv Stock Exchange in the summary of 2021:
A jump of about 65% in the construction index
2021 was a fairly successful year for investors in the Tel Aviv Stock Exchange, who enjoyed double-digit returns in most of the leading stock indices, which, as mentioned, sent them to new record levels, and also led the local stock market to a record high of NIS 1 trillion. .
In an annual summary, the stock exchange’s flagship index presents – Tel Aviv-35 , An increase of about 26% in value, so that it is currently trading around a level of 1,900 points, and a double index Tel Aviv-90 Shows a slightly sharper rise, approaching 30% – good performance from the global stock index, which rose by less than 20% on an annual basis.
Above all is the construction index, which includes close to 30 companies, most of which focus on residential construction and the initiation of residential projects, with a jump of about 65%.
This is against the background that the residential sector in Israel enjoys a peak period, which is reflected in peak prices and peak demand, and the index shares also enjoy sharp jumps in their value, so that most of them also trade around record levels. The commercial real estate sector is also enjoying a boom after being hit by corona restrictions last year, so in an annual summary the real estate index shows a climb of close to 50%.
Two other notable indices in the 2021 summary are eBanks AndOil and gas , With jumps of close to 60% each.
Regarding the banks, the TASE explains that “the increase in the banks’ profitability contributed to the rise in the index, as well as a two-fold extension until the end of 2021 of the mitigating temporary directives issued to the banks by the Bank of Israel, last year with the outbreak of the corona.” Rises in the oil and gas index supported a rise in their prices, following their collapse last year which led to dramatic declines in the index.
Against the jumps in most indices, moderate increases in the range of about 4% -7% in the indices are noticeabletechnology – which was the sector that led the exit from the corona crisis.
Accordingly, the technology indices in Tel Aviv, similar to the global trend, led the positive trend in trading last year, and as noted by the stock market after reaching a peak at the end of 2020, continued to strengthen in the 2021 summary as well.
Proper yields in the bond market
In an annual summary, the bond market was also not absent from the celebration, and as explained on the stock exchange, “similar to stock market trading and the global general trend.”
In the government channel, index-linked bonds show a nice annual return of about 8%, and yields in a similar range (about 7.5% -9.5%) also show the index-linked corporate bond channels in the summary of 2021.
In contrast, shekel government bonds conclude the current year with a moderate yield of about 0.5%, while the corporate shekel channel shows increases in the range of about 3% -6.5%, while foreign currency-linked corporate bonds conclude 2021 with Positive return of about 5.5%.
A decade-long record in the number of companies traded
The past year has been characterized by an unusual wave of initial public offerings (IPOs) on the local stock exchange, so that in an annual summary, close to 100 new companies have been added to the number of companies traded – a record not recorded on the stock exchange since 1993.
Following the wave of new companies that joined the stock exchange, their number reached about 540 – similar to the number of companies traded on the stock exchange in 2012, since then, as a trend, it has experienced a significant decrease in the number of companies traded on it.
The technology industry, which is associated with the success of emerging from the corona crisis on world stock exchanges and which led the recovery in markets from the crisis last year, also stood out in the wave of issues in Tel Aviv. The new issuers are headed by companies in the industry, especially young ones, in a variety of areas of activity.
As noted on the stock exchange, “2021 was a turning point in the high-tech companies’ approach to raising capital in the local market on the Tel Aviv Stock Exchange while accepting them in the institutional market. -8 R&D partnerships.
The aggregate value of all the new companies that joined the stock exchange on an annual basis reaches NIS 48 billion. In front of them, 13 companies were delisted from the stock exchange during the year, the total value of which reached NIS 41 billion – the bulk (about NIS 36 billion) of the value company IFF, less than three years after joining the local trading arena following the acquisition of Frutarom.
The stock exchange also emphasizes in the data presented that “the growth rate of new stock companies in the last two years was 28% – the second largest in the world.”
Records also in the arena of capital and debt raising
In an annual summary, the volume of capital raised in the local stock market crossed a threshold of NIS 25 billion – similar to the record amount raised in 2007, and 50% larger than the amount of NIS 17 billion raised last year.
The stock market attributes the sharp increase in capital raising this year “to a further increase in the wave of initial public offerings that began last year,” and according to the data, close to NIS 11 billion of the annual capital raised comes from more than 90 initial public offerings (IPO). NIS 5 billion made in 2020.
Among the new large recruiters on the stock exchange in an annual summary are the environmental company Veins (NIS 880 million), the technology company Nakes (NIS 670 million), the sports brand chain Retailers (NIS 570 million) – in moves that also included sales offers from the owner, as well as the first Spock company in Tel Aviv, I-Spock (NIS 400 million).
The most prominent capital raising companies that have already been traded on the stock exchange this year, in an annual summary, are the Green Energy Company. Anlite Which raised about NIS 940 million and the competitor Nofar Energy Which settled for NIS 555 million. The income-producing real estate company I will die And network Shufersal Raised a little over NIS 700 million each, and the oil and gas partnership Navits Raised about NIS 640 million.
Records were also set in the debt arena. According to the TASE, the volume of corporate bonds raised to an annual total of NIS 71 billion, “an all-time record, after falling to NIS 52 billion in the previous year and compared to NIS 69 billion in 2019 on the eve of the outbreak of the corona.”
According to TASE data, the increase in the volume of corporate debt raising this year was recorded in real estate companies raising NIS 48 billion – an amount higher than 20% compared to the amount raised in 2020 (NIS 40 billion), and in financial sector companies, which almost doubled. The volume of their debt raising to about NIS 23 billion (compared to about NIS 12 billion in 2020).
A record was also set during the raising process, with a bond amount of NIS 4.9 billion recently issued (index-linked and shekel-linked) Bank Hapoalim – “In the largest issue of bonds on the stock exchange by a company from the financial sector.”
This while Discount Raised an amount of NIS 5.5 billion in bond issues, nominal (commercial securities) and COCO andMizrahi Bank Raised NIS 3.6 billion in bonds and COCO.
The stock exchange explains that the banks’ activity this year “was mainly affected by an increase in demand for credit from households (mainly by apartment buyers) and from the business sector, which returned to full activity.”
The increases in the real estate sector’s debt raising were led by real estate companies, which were responsible for more than 40% of the amount raised (about NIS 30 billion), mainly by income-producing real estate companies that were hit by the corona crisis last year and returned to activity this year.