It looks as though the opposition of Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism) to the initiative to change the trading days of the Tel Aviv Stock Exchange (TASE) from Sunday-Thursday to Monday-Friday will lead to the idea being dropped This is alongside continuing efforts by the minister of finance's bureau and the Israel Securities Authority to complete legislation in the Knesset to change the ownership structure of the TASE, to which a new CEO, Itai Ben-Zeev, was appointed last week.
As far as is known, the difficulty in passing legislation to change the TASE's trading days, in order to bring them in line with the major overseas bourses, does not just stem from the opposition on Gafni's part. Israel's banks are also mostly opposed to the move, on the grounds that it will cost them a great deal of money but will not bring any substantial benefit, and will not change the situation of the local stock exchange.
The change in TASE ownership and making it a for-profit company go along with several other steps, the main one being allowing trading in Israel in the securities of all major international companies, even if they have not issued shares in Tel Aviv. These measures are intended to boost trading on the TASE and to change the negative trend in trading volumes in recent years, particularly in stocks.
"Globes" has also learned of impending change in the balance of forces in the TASE's top management. Chairman Amnon Neubach will have the scope of his position considerably reduced, from full-time to 40%, i.e. two days a week. His compensation will be reduced accordingly. As far as is known, the parties have not yet reached agreement, with Neubach holding out for a more extensive position. The TASE's financial statements for 2015 show that as executive chairman Neubach's salary cost was NIS 1.3 million.
The expected reduction in the scope of Neubach's job comes after the TASE underwent severe conflicts between him and TASE CEO Yossi Beinart, who recently resigned, and his temporary replacement Gal Landau-Yaari. Because of this, the TASE board intervened and redefined the demarcation lines between the chairman and the CEO, and changed Neubach's role from executive to non-executive chairman.
On the reduction in the scope of Neubach's position, the TASE stated: "The matter has still not been discussed in the stock exchange's decision-making bodies, and when a decision is made on the matter, we will make an announcement accordingly."
There has been an atmosphere of change and hope at the TASE following the appointment of Ben-Zeev as CEO. He will take up the post in 2017. Neubach, who, as mentioned, had frequent confrontations with Ben-Zeev's predecessors, said, "We have chosen the best possible candidate and I very much hope that he will succeed. I shall assist him as much as possible." Ben-Zeev has not so far revealed his plans for the TASE, and it appears that his first goal will be to reduce the interest - mainly negative - that the TASE has aroused and to create a new working environment.
Ben-Zeev will face a series of challenges, mainly rehabilitating trading activity, with an emphasis on trading in stocks and primary offerings; repairing relations with the employees, that have been frayed by very tough negotiations on a new employment agreement and the workers' share in the new TASE; and completion, or cancellation, of important moves such as the change in TASE ownership and a link with Nasdaq. All this comes at a time when the TASE is expected to present significant deterioration in its business position, and even to swing to a loss this year. Its financial position is far from where it was before it started building its resplendent current home (under the previous management).
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016