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El Al Joins Elite Stock Index Amidst Security Challenges
El Al Israel Airlines and renewable energy company Doral Energy will join the flagship Tel Aviv 35 stock index on November 5. This marks the first time both companies will be included in the Tel Aviv Stock Exchange's main index. To accommodate the two new additions, three companies, Y.H. Demri, Shufersal, and Kanon, will be removed from the index and demoted to the Tel Aviv 90 index.
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What happened
- 01El Al Israel Airlines and Doral Energy will join the Tel Aviv 35 index on November 5, marking their first-ever inclusion in the flagship index.
- 02Y.H. Demri, Shufersal, and Kanon will be removed from the Tel Aviv 35 index and demoted to the Tel Aviv 90 index.
- 03The index rebalancing is expected to trigger approximately 10 billion shekels in transactions on the Tel Aviv Stock Exchange.
- 04El Al entered the index following a stock surge, while Doral Energy secured its spot due to gains in green energy stocks.
- 05The Tel Aviv Stock Exchange is introducing a new mechanism to phase in new stocks with reduced weightings to moderate market volatility.
- 06Y.H. Demri was affected by a residential real estate slowdown, while Shufersal was impacted by weak second-quarter financial reports.
- 07El Al and Doral Energy are expected to face net selling pressure from exchange-traded funds, while the departing companies expect net buying demand.
The index changes, which are part of a semi-annual rebalancing, are expected to drive approximately 10 billion shekels in transactions. The index currently has 36 stocks following the rapid addition of Palo Alto Networks in August. El Al's inclusion follows a recent surge in its stock, while Doral Energy benefited from growth in the green energy sector.
The departing companies faced sector-specific challenges, with Y.H. Demri affected by a residential real estate slowdown, Shufersal impacted by weak second-quarter reports, and Kanon influenced by its subsidiary OPC's stock performance. Shufersal's demotion to the Tel Aviv 90 index is its second in recent years.
To manage market volatility during the transition, the Tel Aviv Stock Exchange is implementing new rules that will phase in the new stocks with reduced initial weightings. Despite entering the prestigious index, El Al and Doral Energy are expected to face net selling pressure from exchange-traded funds, while the departing companies are projected to benefit from net buying demand.
Summarized by baba from the reports of 3 newsrooms. Updated
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