Tel Aviv Stock Exchange launches foreign company bond index

The Tel-Aviv Stock Exchange (TASE) launched this week, a new index: the Tel Bond-Global, which is based on shekel bonds of foreign companies traded on TASE.

Bonds included in this index are traded at a higher yield than bonds included in the Tel Bond-Shekel index, the credit rating of which is identical to that of the Tel-Bond-Global index.

The index focuses on fixed-interest shekel bonds of foreign companies with no Israeli orientation and offers an added value that does not exist in other Tel-Bond Indices. It is therefore expected to create demand for index products whose base asset is the Tel-Bond Global Index. The new index will join the Tel-Bond Index family alongside the Tel-Bond-Yields and Tel-Bond-Yields-Shekel indices.

This index is designed for three major types of investors:

  1. long’ investors who wish to diversify their portfolio through a high rated bond index with excess yield.
  2. ‘short’ investors who believe that the bond rating does not reflect their inherent risk, which is the cause of a high market price.
  3. ‘hedge’ investors with bonds from this market segment, who seek to hedge their investments in slower periods by through the use of ‘short’ instruments on the index.

The index will consist of 25 bond series with a total market value of NIS 14.5 billion, and will mainly include corporate bonds from the real estate sector. The index will include fixed-rate bonds rated at least (A-) in the Maalot (S&P) rating, or (A3) in the Midroog rating. The weight limit for each bond series included in the index will be 6%.

The number of issuers is 18 and the weight of the largest issuer (THE ZARASAI) is 11.1% (the maximum weight for each issuer will be 20%).

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