Six weeks before the next update of the Tel Aviv 25 index, there are signs of a pending race between four companies for the right to be included or remain in the index.
The next update on June 15 will be difference from the previous one, because of changes in the entry terms instituted by the Tel Aviv Stock Exchange (TASE), in response to past events. The new regulations stipulate that the average market cap of a company joining the Tel Aviv 25 index must be 20% higher than the market cap of a company being taken off the index during the two-week period prior to the update of the index. This means June 1-14 in the current instance.
Another condition for including in the Tel Aviv 25 index is that at least 20% of the company's capital must be held by shareholders who are not parties at interest.
The main change in the regulations is the extension of the period for calculating the market cap from the day before the update to a 20-day period beforehand. This change was instituted in order to prevent the kind of last-minute manipulations designed to increase a company's market cap that have occurred in some recent updates.
In the current race, one replacement seems quite likely: Koor Industries (NYSE: KOR; TASE: KOR), which has a market cap of NIS 4.35 billion, is expected to replace Alvarion (Nasdaq: ALVR; TASE: ALVR), which has a market cap of NIS 2.15 billion - a difference of over 100%.
A close race is likely between Given Imaging (Nasdaq: GIVN; TASE: GIVN), which is in the Tel Aviv 25 index, and Lipman Electronics Engineering (Nasdaq: LPMA; TASE: LPMA), which is again seeking entry, after two previous tries. Given Imaging's current market cap is NIS 3 billion, and Lipman's is 23% higher, at NIS 3.68 billion.
Another company with a question mark hanging over it is Migdal Insurance (TASE: MGDL), because it does not meet the threshold condition for liquidity - parties at interest own 83.7% of the company. Market sources believe that Assicurazioni Generali SpA (Milan:GASI) will distribute some of its shares in Migdal in a few days, to prevent it from being removed from the index.
Published by Globes [online], Israel business news - www.globes.co.il - on May 5, 2005