How has the Tel Aviv Stock Exchange (TASE) reacted to the announcement by Mylan that it will delist from the exchange, and what will be the effect on the exchange's main indices, given that Mylan is the company with the highest market cap in those indices?
The TASE appears unfazed by Mylan's move, for several reasons. AS far as the TASE is concerned, the Tel Aviv 35 Index will henceforth better reflect the Israeli economy, and it will also be less biased towards the pharmaceuticals sector.
Mylan has no business connection with Israel, and it was clear when it chose to list on the TASE, in the course of its attempt to take over US-Israeli pharmaceuticals company Perrigo, what its motivation was and what would happen when the takeover bid failed. Now there will be competition between Israeli companies to take its place on the Tel Aviv 35 Index.
Moreover, from the TASE's point of view, this is an opportunity to sharpen its focus on encouraging Israeli companies to make IPOs locally. So far this year fifteen such companies have done so, and there are more in the pipeline.
The TASE management said in a statement: "We believe that the Tel Aviv Stock Exchange should primarily reflect the local economy, and we are happy that since the beginning of this year fifteen new companies have joined, with more to come.
"In this instance, delisting will help the Tel Aviv 35 Index to reflect the Israeli economy more faithfully, and will moderate the influence of the pharma sector on the index, which is a positive outcome in itself."
Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2017
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