El Al and Doral Energy to Join Israel's TA-35 Index
Translated & summarized from Calcalist by baba
El Al Israel Airlines and Doral Energy will join the TA-35 index, while Damari, Shufersal, and Canon will be removed, effective November 5. The changes are part of the Tel Aviv Stock Exchange's bi-annual index rebalancing. New rules aim to moderate the impact of index fund flows on stock prices. Several other indices, including the TA-90 and SME-60, will also undergo significant component changes.
The story in 6 lines · by baba
- El Al and Doral Energy will join the TA-35 index, replacing Damari, Shufersal, and Canon.
- The index changes, determined on October 15, will be implemented on November 5.
- New rules will assign a 0.25 weight factor to newly listed stocks entering major indices.
- Damari, Shufersal, and Canon were removed due to market weakness and poor financial reports.
- Best Group was excluded from the TA-90 index for failing to meet trading volume requirements.
- Significant turnover is also expected in the TA-90, SME-60, and Growth indices.
El Al Israel Airlines and Doral Energy are set to be included in the Tel Aviv Stock Exchange's flagship TA-35 index, replacing Damari, Shufersal, and Canon. The changes, which follow the market close on October 15, will take effect on November 5. This bi-annual index rebalancing, occurring in May and November, will see the TA-35 return to its intended 35-stock composition after temporarily holding 36. Doral's inclusion is attributed to a surge in renewable energy stocks earlier in the year, while El Al's entry was secured by a recent stock price jump linked to a security incident. The departing companies faced challenges: Damari was affected by a downturn in Israel's residential real estate market, Shufersal's stock weakened after a poor second-quarter report, and Canon's performance was impacted by its subsidiary OPC's investment decisions. Six additional companies will join the TA-90 index, including newly listed Tadmor, Avissar, and Bagira, alongside dual-listed Alpha Tau, and established stocks Telsys and Afcon Holdings. Several companies, including Electra Real Estate, Arad Industries, Qualitao, Ackerstein Group, Nassiim VeBinyan, and Sela Real Estate, will exit the TA-90. To mitigate the impact of index fund flows, a new rule will assign a 0.25 weight factor to stocks entering the TA-35 or TA-90 for the first time, reducing their initial impact and demand from index funds. This factor will increase to 0.5 in February before being removed in May. The exchange also prevented Best Group from entering the TA-90 due to low trading volume, despite meeting other criteria. Other indices will also see significant turnover, with the SME-60 index adding and removing 11 stocks, and the Growth index incorporating 30 new companies.
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