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| The Tel Aviv Stock Exchange (TASE) launched a bond index tracking corporate bonds denominated in New Israeli Shekels (NIS), which are not linked to the Consumer Price Index (CPI), and bear fixed interest. The new “Tel-Bond Shekel Index” who will track the prices of TASE-listed corporate bonds that meet the following threshold conditions:
• a market cap of at least NIS 250 million;
• at least an “A-“ rating according to the S&P Maalot scale or Midroog;
• Minimum time to maturity - 12 months.
Investor demand for corporate bonds has generated accelerated growth in this market in the past few years. Since the beginning of 2007, when Tel-Bond indices were launched, average daily turnover has increased by more than 150%. 22 ILNs (index-linked notes) on the Tel-bond indices have since been issued, representing holdings of more than NIS 9 billion, more than 10% of the market cap of the underlying assets.
“The new index completes the current selection of TASE bond indices and provides investors with an additional instrument for tracking corporate bond performance. In addition, the new index will serve as an underlying asset for ILNs tracking the new index and for mutual funds. This will likely increase the liquidity and demand for non-linked NIS bonds”, stated Rina Shafir, Senior Vice President, Trading and Clearing Department. “TASE will examine the possibility of launching additional Tel-bond indices in the future, in accordance with market needs.”
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