While all companies on the TA-25 Index currently maintain a float of at least 15%, three companies fall below the 20% mark.
The TASE has also decided to add a minimal float value of 400 million shekels (about $89 million) for TA-25 companies. All companies on the index currently meet that level.
The TA-25, the TASE’s flagship index, serves as a leading benchmark for investors and an underlying asset for active options trading on the Exchange. The index is comprised of the 25 largest shares by market capitalization. The total trading volume of the TA-25 shares represents over 60% of the Exchange’s total trading volume of equities. The index is updated twice annually, on the first day of trading each January and July. The relative weighting of a share in the index is based on the ratio between its market capitalization and the total value of all 25 shares, with a 9.5% cap for a single share.
The Exchange has also decided to gradually raise the minimal float percentage for companies on the TA-75 and the Tel-Tech-15 indices to 15%. As of January 1, 2005, companies will be required to maintain a float of 10%. That percentage will rise to 15% on July 1, 2005. Five companies on the TA-75 currently maintain a float below 10%, while seven others fall below the 15% mark. Companies on either of the two indices will also be required to maintain a minimal float value of 80 million shekels (about $18 million). Currently, eight companies on the TA-75 do not meet that criterion. The TA-75 index comprises the TA-100 shares, excluding the TA-25 shares.
“Raising our float requirements will encourage companies to increase the extent of their share distribution, which, in turn, will improve the liquidity of shares,” said Dror Shalit, Senior Vice-President and Head of the TASE Trading and Clearing Department. “The decision both addresses the needs of investors and follows similar steps taken by the world’s leading index providers.”
