Tel Aviv Stock Exchange Expects Up to 17 Billion NIS in Biannual Rebalancing
The Tel Aviv Stock Exchange expects heavy trading of up to 17 billion NIS today due to the biannual index rebalancing, with El Al and Doral entering the TA-35.
The Tel Aviv Stock Exchange is expected to record massive trading volumes today, ranging between 15 billion and 17 billion NIS, driven by the biannual index rebalancing. Yaniv Pagot, head of trading at the exchange, estimates that index updates will inject between 12 billion and 13 billion NIS into the market, with the vast majority of activity concentrated during the closing auction.
During this phase, exchange-traded funds and index-tracking funds will adjust their portfolios to match the revised composition and weightings of stock indices. According to SmartBull data, index-tracking funds managing 94 billion NIS across 425 securities are expected to rebalance holdings worth 11.7 billion NIS.
Index Changes and Notable Adjustments
National carrier El Al Israel Airlines and renewable energy firm Doral are entering the TA-35 index for the first time. Meanwhile, construction firm Y.H. Dimri, retail giant Shufersal, and holding company Canon are exiting the benchmark index.
The largest sell-side pressure is expected in Teva Pharmaceutical Industries, where funds are projected to offload 1.4 billion NIS worth of shares due to a reduction in its index weighting. Other significant sell orders include El Al (356 million NIS), Bank Hapoalim (322 million NIS), Sela Real Estate (265 million NIS), Gilat Satellite Networks (246 million NIS), Bank Leumi (224 million NIS), and Elbit Systems (188 million NIS).
On the buying side, cybersecurity firm Palo Alto Networks stands out with projected purchases of approximately 800 million NIS, marking the second of three phases for its gradual integration into the TA-35 index. Additional strong buy orders are slated for Tower Semiconductor (396 million NIS), Y.H. Dimri (256 million NIS), Phoenix Holdings (241 million NIS), Canon (203 million NIS), and Shufersal (189 million NIS).
Mechanics of the Rebalancing Event
Stock indices are weighted according to free-float market capitalization, with strict caps placed on individual stock weights. Because ongoing market price fluctuations alter these proportions, the exchange recalibrates index compositions twice a year to enforce maximum weight limits and adjust constituent rankings.
Pagot emphasized that today's event also incorporates updates from external index providers. While falling short of the record 24 billion NIS volume registered during the rebalancing six months ago, today's projected turnover equals nearly four days of standard trading on the Israeli equity market in a single session.
