The new companies get a new index.
The Stock Exchange announces the launch of the “Tel-TopNew30” index.
The index will include the 30 largest companies listed for trading in recent years.
The market value of the new index is about NIS 80 billion and the return on its composition is 12.4% since the beginning of the year.
Tel Aviv, March 22, 2022 – The Board of Directors of the Tel Aviv Stock Exchange (Tel Aviv: Bersa) has approved the launch of a new index – the Tel Aviv Index – TopNew30 which will include the 30 largest companies listed on the Tel Aviv Stock Exchange on 5 In recent years, in all industries in the stock market.
In the past year, close to 100 new companies have been registered for trading, most of them as part of the IPO, more than in the entire decade before that, including 2 companies that were registered for double registration. In light of the volume of the number of new companies, the stock exchange will launch a unique index that will reflect the financial performance of the large companies that have issued in recent years.
The index will be a new investment instrument that will enable investment in new companies in a decentralized manner and has significant benefits, among other things, the index will be a complementary investment instrument for participation in issues and will allow the public to invest in new companies.
It should also be noted that last June, the stock exchange introduced a new method for calculating the base price, which allows for an improved measurement of the companies’ performance in issues without missing the first day return and taking into account the structure of the issue package. The prevailing issuance method of a non-uniform offer does not leave enough holdings to the public, which will be possible through investment in the new index.
Recently, a research unit of the TASE even published an article stating that long-term institutional investors are the main buyers in initial public offerings and therefore the new index will allow the general public and short-term investors, mutual funds and portfolio managers, to invest in issues through the new index. Moreover, the lack of analysis in many of the new companies excludes investors from those shares, so the new index will allow for diversification and reduce the risk involved in investing in initial public offerings.
In the last two years, the TASE has launched a series of new bond indices and stock indices, as part of its policy of expanding the range of products and making adjustments and innovations in accordance with the needs of investors.
Characteristics of the index – The following are the characteristics of the index in accordance with the simulation conducted on 22/03/2022 (attached in the appendix):
- Number of shares expected to be included in the index – 30
- Market value – about NIS 80 billion
- The value of public holdings – about NIS 36 billion
- The yield of the index composition since the beginning of the year – about 12.4%.
The index represents a variety of industries, including: companies in the field of trade and services (21% of the value of the index), technology (22%), energy, oil and gas (17%), financial services (18%) and more.
The challenge – stability alongside turnover – how do you keep the index constantly reflecting new stocks?
The main challenge in developing an index that should reflect stocks of new public companies is when to replace them with newer stocks. Experience shows that high turnover can hurt yields and deter investors, but there is a desire that the index will indeed reflect new stocks and not too old stocks.
Therefore, the TASE has determined that the index will include shares of companies with up to 5 years of experience as a public company, and after this period the share will be removed from the index.
In addition, in order to be prepared in case of a decrease in the volume of issues, it is proposed that in any case the index population will not be less than 20 shares, ie when the number of shares in the index reaches 20, no share will be deducted from the index.
The base index of the index on the day of its launch will be the same as the base index of the Tel Aviv-Rimon index on the same day. The index will be calculated according to the formula of the gross total return index.
The launch date of the index – will be determined later and on the basis of the end of the technical preparation.
Industry distribution and composition of the index in accordance with the simulation conducted on 22/3/2022
tax’ | share | Date of entry To the stock exchange | Market value in NIS million | Weight | Sub-industry |
1 | Energian | 20181029 | 8,047 | 5.00% | Oil and gas exploration |
2 | OC Energy | 20170816 | 7,868 | 5.00% | energy |
3 | Isracard | 20190414 | 3,162 | 5.00% | Financial services |
4 | Fattal Holdings | 20180225 | 6,381 | 5.00% | Hotels and tourism |
5 | Rada | 20210202 | 2,151 | 5.00% | Security |
6 | Veins | 20210609 | 4,366 | 5.00% | Cleantech |
7 | Argo Properties | 20210518 | 2,080 | 5.00% | Yielding real estate abroad |
8 | The stock market move in the cell | 20190801 | 1,551 | 5.00% | Financial services |
9 | Navits Peter Yahsh | 20171001 | 1,860 | 5.00% | Oil and gas exploration |
10 | Retailers | 20210519 | 4,043 | 5.00% | Marketing networks |
11 | Generation Capital | 20190303 | 1,341 | 5.00% | Investment and holdings |
12 | Nofar Energy | 20201217 | 2,826 | 4.75% | renewable energy |
13 | Direct Financing | 20200827 | 2,216 | 4.68% | Non-bank credit |
14 | Yohannoff | 20191127 | 3,405 | 4.45% | Marketing networks |
15 | Altshuler Shaham Camel | 20190722 | 2,689 | 3.51% | Financial services |
16 | Doral Energy | 20200610 | 2,044 | 3.44% | renewable energy |
17 | Max Stock | 20200917 | 1,229 | 2.75% | Marketing networks |
18 | Polyram | 20201201 | 1,636 | 2.75% | Chemistry rubber plastic |
19 | Pomegranate | 20210727 | 1,621 | 2.72% | Building |
20 | Danya Cebus | 20210301 | 2,868 | 2.14% | Building |
21 | Israel Shipyards | 20200910 | 2,625 | 1.96% | Investment and holdings |
22 | Thorpez | 20210525 | 2,080 | 1.94% | food |
23 | Supergas | 20200618 | 1,028 | 1.73% | energy |
24 | Nakes | 20210513 | 2,110 | 1.58% | Software and Internet |
25 | Delta Brands | 20210309 | 1,955 | 1.46% | Marketing networks |
26 | Diplomat Holdings | 20210308 | 1,554 | 1.45% | trade |
27 | Ackerstein Group | 20210608 | 1,117 | 1.04% | Metal construction products |
28 | Aconergy | 20210713 | 1,072 | 1.00% | renewable energy |
29 | Top gum | 20210812 | 1,132 | 0.85% | Podtech |
30 | Terminal X. | 20210729 | 1,084 | 0.81% | Marketing networks |
79,139 | 100% |
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[1] According to the composition of the index as determined in the simulation from 22.3.22.