Tel Aviv Stock Exchange Sees Dramatic Gains After Shifting to Friday Trading

A significant reform implemented at the Tel Aviv Stock Exchange in January, which shifted trading days from Sunday-Thursday to Monday-Friday, has resulted in a dramatic improvement in key market indicators, according to new research by the Israel Securities Authority. The move aimed to align the Israeli market with major international exchanges.

The data reveals a substantial surge in trading activity. The average daily trading volume on Fridays jumped to NIS 2.6 billion, a 100% increase compared to the NIS 1.3 billion average on Sundays before the change. Even accounting for general market increases during that period, this represents a sharp 57% rise specifically for the adjusted trading day. Furthermore, daily turnover velocity, a measure of stock liquidity, increased by 58%.

These achievements are particularly noteworthy given that Friday is a shortened trading day, concluding at 1:50 PM and not overlapping with US market hours. Another key success of the reform is the dramatic growth in international investor participation. Previously, the misalignment of trading days was a barrier for foreign investors. Now, their share of trading on the adjusted day has more than doubled, rising from just 15.3% on Sundays before the reform to 38.2% on Fridays afterward.

Finally, the adjustment in trading days has also led to reduced trading costs for investors and a more efficient market. The average bid-ask spread, an indicator of trading costs, narrowed by 11.3% on Fridays compared to previous Sundays. In conclusion, the research findings demonstrate that synchronizing trading days with the global market has removed institutional barriers, increased liquidity, and strengthened the Israeli capital market.