Investments in the main indexes of the Tel Aviv Stock Exchange in 2008 lost 50 percent to 80% of their value. "If 2007 was marked as one of our best years, 2008 was one of the worst years we have seen, due to the global financial crisis," TASE CEO Esther Levanon said at an end-of-year conference in Tel Aviv on Monday. "Despite Israel's positive macroeconomic conditions, TASE investors were not spared the precipitous decline in share prices, similar to that experienced in Europe and US markets. "Public offerings have come to a near standstill except for offerings of financial instruments and private placements, while the market for government bonds has grown rapidly." Only two new companies joined the TASE in 2008, compared with 62 public offerings in the previous year. Levanon said turnover on the TASE had fallen to NIS 2 billion a day this year, from NIS 2.08b. in 2007, because of the drop in stock prices, not because of a decline in the volume of transactions. Following gains of 25% to 31% on the main Tel Aviv-100 and TA-25 indexes, respectively, in 2007, the TA-100 plunged 53.1% and the TA-25 dropped 48.6% this year. The Real Estate Index, which rose 0.9% last year, fell 80% in 2008, while the index of the top 15 financial firms was down 58%. "In 1983, prices for floating shares fell 90% over 12 months," TASE chairman Sam Bronfeld said Monday. "It seems to me that 2008 could be called a year of spilled milk. But we shouldn't cry too much over spilled milk." The unprecedented fall in corporate bond prices, which constitute a key component of many institutional portfolios, left its mark as well, leading to huge losses for pension and provident funds. The Tel-Bond 20, the index of the leading bond issuers, was down 8% this year after a 6% rise in 2007. "Part of the problem that has come out of the global financial crisis is that we were burned by the ratings companies," Bronfeld said. "It turns out that the ratings companies do not have a clue about what they are doing. All the ratings are worthless, and we, as citizens, must take responsibility for our investments. Everyone is responsible for his own destiny. There are no goalkeepers." Levanon expressed concern over the crisis in the corporate-bond market, emphasizing the importance of the market for the non-banking credit sector. In 2008, corporate bond offerings totaled a mere NIS 22.5b., only a fourth of the offerings of last year, which amounted to NIS 87b. "Last week, the chairman of Bank Hapoalim already warned that the banks will not be able to provide all the credit needed in the economy," Levanon said. "The corporate-bond market is essential for companies to raise money, and without the proper functioning of the non-banking sector, companies will not be able to raise enough credit. Companies need a market to operate in the non-banking sector." Levanon said the exchange had decided to take a number of temporary measures to help the local market cope with the world financial crisis. The measures include lowering the entry criteria for leading indexes from a float threshold of 25% to 20% of a company's issued shares and shortening the trading day, starting January 1, to allow TASE members and the TASE itself to save on operating costs. "Since the outbreak of the crisis in September, the TASE was required to review and adjust numerous rules to conform to the new reality," Levanon said. "Nothing is sacred. The tumultuous price fluctuations that have plagued TASE since September compel it to test additional rules and arrangements and to evaluate their operation under extreme conditions such as the circuit breakers." The exchange was considering a modification of the criteria for the application of the "English opening" system, which allows a cooling off time in the event of extreme fluctuations in pre-market trading, she said. The exchange is also reviewing the criteria for the activation of the circuit breakers, which can shut down the market, and is considering extending them to the bond market, Levanon said. "If the market stoppage system is activated twice a week, it will have no significance," she said. Levanon emphasized that although the appropriateness of opening the exchange on days in which extreme stock declines are anticipated was questioned during October, when the High Holy Days took place, the renewal was imperative and a necessity. "Very few exchanges around the world closed their gates during this period, and those that did were not among the more advanced markets," she said. "The exchange must also remain open in unprecedented times. A decision not to open the exchange for trading would contribute additional uncertainty and unease to already concerned investors." Levanon said that the exchange would continue to expand its consolidation links with global markets to attract foreign investor activity and advance several infrastructure projects designed to enhance Israel's capital market. The first project is the creation of the infrastructure required to clear "repo" transactions in government bonds, she said. The TASE has completed preparations and the launch of the new market is scheduled for the beginning of 2009, she said. Another project, Levanon said, is the completion of preparations for the launch of equity options, a product whose absence has been felt for a long time, on a select number of highly liquid shares.