S&P brings additional indices to Israeli market

S&P Indices has launched two indices of the largest and most-liquid stocks on the Tel Aviv Stock Exchange (TASE), one of the best performing developed market stock exchanges over the last decade.

The S&P Israel BMI Capped Growth and Value Indices, tradable indices are based on the methodology of the S&P Israel BMI (Broad Market Index) Style Indices with additional rules applied, excluding stocks from the Israel BMI that are not an index constituent of the TASE, and capping individual stocks at 10% at each quarterly rebalancing.

Research from Bloomberg in February showed that despite geopolitical unrests, the TASE has offered the highest risk adjusted returns of any developed market stock exchange over the last decade.

Michael Orzano, associate director of global equity indices at S&P Indices, said: “The S&P Israel BMI Capped Style Indices are examples of our responsive and innovative approach to creating new indices. We have customised the S&P Israel BMI Style Indices to meet the needs of local Israeli investors and deliver a tradable index capable of supporting financial products in the local market.”

The indices have been licensed to KSM, a leading index-linked certificate manager in the Israeli market, which has issued Exchange Traded Notes (ETNs) based on the indices. The indices are calculated in real-time from Sunday to Thursday to coincide with the TASE trading hours.

The S&P Israel BMI Capped Growth Index is comprised of 76 stocks, including Israel Chemical Corp and Bank Leumi Le-Israel, while the S&P Israel BMI Capped Value Index, is comprised of 78 stocks, such as Bezeq Israeli Telecom and Bank Hapoalim.

Roy Regev, KSM founder said: “These new style indices present a new era for the Israeli index based market. Israel has reached developed market status and is one of the most interesting countries compared to its peer group. These unique indices provide a new way for passive managers and other market participants to exploit the potential in the growing Israeli economy.”

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