Israel Stock Market Sees Trading Volume Double After Shifting to Friday
A new study by the Israel Securities Authority (ISA) indicates that shifting the Israeli stock market's trading day from Sunday to Friday has significantly boosted trading volumes and foreign investor activity. The average daily trading volume on Fridays reached approximately NIS 2.6 billion, a doubling compared to the NIS 1.3 billion average on Sundays prior to the change. In contrast, trading volumes on other weekdays (Monday to Thursday) saw a more moderate increase of about 43% during the same period.
The study also highlighted a substantial improvement in market liquidity. The average bid-ask spread, a measure of liquidity, narrowed by approximately 11%, decreasing from 0.48% on Sundays to 0.43% on Fridays. A narrower spread generally signifies a more liquid and efficient market.
Foreign investor participation saw a dramatic surge, with their share of trading volume on Fridays increasing 2.5 times, from 15.3% on Sundays to 38.2% on Fridays. The ISA noted that this increase in foreign activity on Fridays did not come at the expense of their activity on other days, suggesting an overall net increase in their engagement with the Israeli market.
This shift is part of a broader initiative by the ISA and the Tel Aviv Stock Exchange to align the Israeli capital market with the schedules of major global markets, thereby facilitating greater participation from international institutions and investors. The ISA has been promoting measures over the past two years to enhance the accessibility of the Israeli market to global investors, with the move to a Monday-Friday trading week being a key component.
ISA Chairman Adv. Spira Zingher stated that the research demonstrates the significant value of connecting the Israeli capital market to major international markets. He added that the move to Friday trading not only increased trading activity but also improved liquidity and boosted foreign investor participation. The ISA and the Stock Exchange plan to continue promoting measures to strengthen the local market's connection to global markets and enhance its attractiveness to foreign investors.
