Tel Aviv makes technological trading leap

Following on the tracks of Cbot (the Chicago Board of Trade), Deutsche Terminbourse and Liffe (the London Financial Futures and Option Exchange), the Tel Aviv Stock Exchange has announced it will launch its electronic trading system for government bonds tomorrow, one month ahead of schedule.

According to the exchange, the move is aimed at attracting foreign investors and boosting liquidity in the market.

The decision was made to bring forward the launch after the exchange saw a boost in trading on short-term treasury bills when they had been transferred to electronic trading earlier this month. The electronic dealing of T-bills had also caused a sharp decline in off-the-floor deals.

Corporate bonds will move to electronic trading early next year. The launch of Tel Aviv's electronic trading platform indicates the country's desire to keep pace with the world's financial markets. However analysts are dubious that it will encourage much foreign investment until the Israel overcomes geopolitical problems and a high public debt.