In its meeting on Thursday (June 15), the Tel Aviv Stock Exchange (TASE) Board of Directors approved the launch of a new index, Tel Bond-Global, based on shekel bonds of foreign companies traded on the 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.
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%). As of June 18th, 2017, the index includes weighted gross domestic yield of 4.7% and a weighted average of 3.6 years.
This index is designed for three major types of investors: 'long' investors who wish to diversify their portfolio through a high rated bond index with excess yield, 'short' investors who believe that the bond rating does not reflect their inherent risk, which is the cause of a high market price, and '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 Tel-Bond-Global index will be launched on July 16, 2017, with the closing date for the index being end of trade, July 6, 2017.
