BusinessHABTel aviv stock exchange: Trading on the Tel Aviv Stock Exchange (TASE) is a little different than other exchanges and brokers.
In order to trade on the TASE, you must be a member of an eligible broker and be approved for trading on the exchange.
Let’s take a look at how you can become a TASE trader and what stocks are traded there.
The Tel Aviv Stock Exchange (TASE) is Israel’s primary stock exchange and third largest in the world based on market capitalization. It lists more than 250 securities with a combined market capitalization exceeding $110 billion as of November 2018.
The key differences between trading on the TASE vs NYSE or another global stock exchange are that majority ownership must be Israeli, dividend payments cannot exceed 10% of earnings, and no company can have more than 20% foreign ownership.
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How to Trade on the Tel Aviv Stock Exchange
With a market capitalization of $108 billion and a median trading volume per day of $219 million, the Tel Aviv Stock Exchange is a small but growing exchange in an emerging market. The exchange has been recognized as among the top-performing markets worldwide in recent years and continues to attract an increasing number of companies listed on its exchanges. If you’re thinking about investing in Tel Aviv stocks or other securities traded on the TASE, it’s important to understand how this exchange works, who trades there and how you can get involved. Keep reading to learn more about trading on the TASE so you can decide whether or not investing in Tel Aviv stocks is right for you.
The Tel Aviv Stock Exchange (TASE)
The Tel Aviv Stock Exchange is the primary securities exchange in Israel. The TASE is regulated by the Israel Securities Authority (ISA) and is considered one of the top-performing exchanges in the world. The TASE is overseen by a 15-member board of directors made up of representatives from member firms and the public sector. The Tel Aviv Stock Exchange hosts more than 1,000 companies from a variety of sectors including communications, energy, financial services, real estate and life sciences. Around 35% of the companies on the TASE are engaged in life sciences, 10% are real estate companies, 9% are communications firms and 8% are financial services companies. The TASE is a rising star in the world of emerging markets exchanges. From 2003 to 2017, the market capitalization of companies listed on the TASE rose from $29 billion to $108 billion.
Who Trades on the TASE?
Many international investors, especially Israelis living abroad, prefer to trade the TASE over other global exchanges. While the TASE is primarily a domestic exchange, over 40% of shares traded in 2018 were held by foreign investors. For example, trading on the TASE increased significantly when the US-China trade war took a toll on Chinese stocks. During periods of uncertainty, many global investors look to Israel as a source of stability because of its strong government and economy. Trading on the TASE is open to both Israeli and international investors. However, restrictions do apply in certain cases. For example, you must be an Israeli citizen to trade shares on the TASE if you plan to use a margin loan to finance the investment.
How to Trade on the TASE
Trading on the TASE is similar to trading stocks on other major exchanges. You can buy and sell shares of companies listed on the TASE through an online trading account. There are a few things to keep in mind if you plan to trade on the TASE, however. – Brokers who facilitate trading on the TASE are regulated by the ISA, so you can rest assured that your investments are being managed properly. – All trading accounts must go through a verification process before you can start trading on the TASE. This verification process may take up to six weeks to complete. – You can trade directly with another investor or broker or use a trading system. If you use a trading system, you will likely pay a commission to the broker.
TASE Participants
There are two types of participants on the TASE – securities firms and clearing and settlement systems. Securities firms are the organizations that buy and sell securities on the exchange and facilitate transactions. Clearing and settlement systems are organizations that hold and manage securities until the actual transaction occurs. The TASE also has a group of designated market makers (DMMs) who make a living from trading securities on the exchange. In order to become a DMM, a securities firm must prove that it has enough assets to cover the value of all securities it holds in inventory.
Limitations of Trading on the TASE
Before you commit to investing in Tel Aviv stocks or any other securities listed on the TASE, you should know that trading on the TASE comes with certain limitations. For example, you may not be able to sell your shares immediately after purchase. The settlement period for TASE transactions is currently five business days, so you won’t be able to access the full value of your investment right away. In addition, the TASE is a fairly small exchange with a limited trading volume. This means that you may have trouble finding a buyer for your shares if you decide to sell them. Trading on the TASE can be risky, but it can also offer significant rewards for investors who are willing to take on the extra risk.
Conclusion
The Tel Aviv Stock Exchange is a small but growing exchange in an emerging market. The TASE is primarily a domestic exchange, but many international investors prefer to trade there over other exchanges. When the US-China trade war took a toll on Chinese stocks, many investors looked to Israel for stability. Trading on the TASE comes with certain limitations, such as a five-day settlement period and a limited trading volume. However, the TASE can be an excellent source of investment opportunities for those who are willing to accept this risk.
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