Tel Aviv Stock Exchange (TASE) will limit the weight of new companies joining its major indexes TA-25, TA-75 and TA-100 indexes at 4 percent, according to an e-mailed statement.
“We acted swiftly to correct distortions in favor of the market, without closing the door to foreign companies that want to trade on the stock exchange, ” TASE chief executive officer Yossi Beinart said in the statement.
In the past three months several U.S.-traded biotech companies, such as MannKind Corp. and BioTime Inc., have listed in Tel Aviv. Earlier this month Mylan NV dual-listing become the largest ever addition to the exchange, which threatened to skew the main index heavily toward pharmaceutical shares.
Yaniv Pagot, the head of strategy at Ayalon Group Ltd. told Bloomberg: “The bourse intends to complete the reform of the indexes and change the current method of calculating them so that they will be more scattered and less dependent on a single share. It makes no sense to introduce a share with a weight of 10 percent and then require the holders of the index to sell.”