Demri Set to Exit TA 35 Index Despite Previous Capital Injection

The Israeli stock exchange is preparing for its regular index rebalancing, with real estate developer Demri currently positioned to be removed from the prestigious TA 35 index. Demri ranks 48th based on the public float value of its shares, falling below the 40th-place threshold for remaining in the index. This ranking is determined by multiplying the share price by the number of shares held by the public, not the company's total market capitalization.

Super-Pharm is currently ranked 45th, and Cannon is precisely at the 40th position, placing it on the borderline. The TA 35 index currently includes 36 stocks after Palo Alto Networks was added in August without a corresponding removal. The upcoming adjustment is expected to bring the index back to its intended 35-stock composition. As no stocks outside the index are currently ranked 30th or higher, the number of incoming stocks will be one less than the number of outgoing stocks.

The crucial date for determining the index composition is October 15, with changes taking effect on November 5. Any fluctuations in stock prices and public float value before this date could alter the current standings. Demri previously attempted to improve its ranking in October 2025 by conducting a private placement of NIS 234 million to institutional investors. This move increased the public float but also diluted existing shareholders, causing Demri's stock price to drop by approximately 5% at the time.

The dynamic of index inclusion and exclusion presents a paradox: increasing the public float to improve ranking can also pressure the stock price downwards. The impact of index changes on stock prices is also diminishing, with recent research suggesting that the 'index effect' is less pronounced than in previous decades, as markets anticipate changes in advance. Doral is the leading candidate for inclusion in the TA 35, followed by Fattal and Energix if a second spot becomes available. Doral's potential entry is bolstered by a 55% increase in revenue and a reduced loss in its last quarter.

New weighting factors are also being introduced, spreading the initial demand for newly included stocks over three periods instead of concentrating it on a single day. This aims to reduce the volatility associated with index adjustments. Companies like Teva, Leumi, and others are expected to face selling pressure due to adjustments in maximum weightings. For the TA 90 index, Tidhar, Alpha Tau, and Talisys are among the candidates for inclusion.