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Securities and derivatives trading on the Tel Aviv Stock Exchange will be extended by 30 minutes beginning February 1, in an effort to boost dual-listed trading on the TASE and the US stock exchanges.
"This is another move by the Securities Authority to made global trading easier," said Benny Sharvit, head of research and global markets at Gaon Investment.
The Hauser Commission, which was set up by the Security Authority, had recommended extending the trading regarding stocks and derivatives to 5:30 p.m. to extend the overlap in trading between the Tel Aviv and Wall Street exchanges. The greater overlap is set to reduce arbitrage spreads, which is the difference in the price of a share that is traded on two exchanges.
Under the new trading hours, prices of securities will fluctuate according to regular supply and demand until 5:10 p.m. to 5:15 p.m. and then trade will continue at the closing prices until 5:30 p.m.
"Extending the hours during which trade is held on the TASE in parallel with the US markets will improve the quality of closing prices in Tel Aviv," said Dror Shalit, a senior vice president and the manager of the trade and clearing departments.
Shalit noted that the extension of the trading day was only one of the steps being taken to improve the domestic capital market globally and to increase its fairness.
The TASE has been pushing hard for seamless dual-listing in an effort to boost liquidity and volume. Since the Knesset passed the dual-listing law in 2000, 50 dual-listed companies have been trading on the TASE. Among the dual-listed companies are Teva Pharmaceuticals, Nice Systems, Partner Communications, Elbit Systems and US company Perrigo, formerly Agis Industries.
The law enables companies that are traded on US markets to dual-list on the TASE at no additional cost and entails no additional regulatory requirements. As such dual-listed companies are exempted from listing costs and maintenance regulations. At the same time, they benefit from a broadening investor base and a substantial increase in their shares' trading volume as a result of greater investment by Israeli investors.