.jpg)
Starting on December 3, 2023, the minimum order size for bonds and T-bills will be reduced, as approved by the Israel Securities Authority.
The minimum order size determines, specifically for each security, the minimum quantity that can be included in an order submitted to TASE during the continuous trading phase. As previously published, over a year ago the minimum order size in the equity market was reduced from NIS 2,000 to NIS 500 and for shares included in the TA-35 Index from NIS 5,000 to NIS 500. This move has significantly increased the number of transactions and the trading volumes deriving from “small” orders, particularly by the public.
The reduction of the minimum order size for bonds and T-bills will facilitate portfolio diversification, especially considering the current high demand for low-risk assets, which are taking center stage in today's high-interest environment, as well as amidst the war imposed on Israel, which has significantly increased the Government’s financing needs, making it imperative, now more than ever, to make the debt market accessible to all local investors.
One of the existing trading barriers for the purchase of those securities is the high minimum order size. For example, a retail investor, with a portfolio of NIS 50,000 is unable to effectively diversify risks - if he chooses to invest exclusively in government bonds, he is limited to a single bond (during the continuous trading phase), since the minimum order size is NIS 30,000. If he chooses to invest in corporate bonds, the retail investor will be able to purchase only 5 bonds due to the NIS 10,000 minimum order size (it should be noted that the investor is able to purchase bonds in any amount during the auctions).
Accordingly, starting on December 3, 2023, the minimum order size for bonds and T-bills will be as follows:
- For government bonds - NIS 10,000 instead of NIS 30,000.
- For corporate bonds - NIS 5,000 instead of NIS 10,000.
- For T-bills - 10,000 par value instead of 30,000 par value.
It should be noted that TASE is one of a few exchanges in the world that maintains a transparent and accessible electronic bonds market at affordable costs, which now, with the reduced minimum order size, facilitates participation with even smaller amounts.
Yaniv Pagot, EVP, Head of Trading at TASE: “Enhanced liquidity in the bonds market will be highly conducive to reducing the financing costs of the Israeli Government and the public companies, especially as the financing burden becomes heavier than ever, increasing the companies’ dependence on the banking system. In addition, the reduction of the minimum order size in the Israeli bonds market will improve the trackability of the bond indices and reduce tracking errors, to the benefit of the investors. The market of ETFs and tracking funds that track Israeli bond indices manages close to NIS 53 billion and offers diversification and investment opportunities in this area.”
