MTS Israel is pleased to announce that following on the decision of the Israeli capital markets forum, it plans to introduce an electronic repo market for Israeli government bonds by the first quarter of 2008.
On July 5, a committee composed of the Israeli regulators, as well as financial institutions, selected MTS over other applicants as the designated repo platform for shekel-denominated fixed-income securities.
“We look forward to the launch of MTS’s repo market in Israel as it will bring the transparency and efficiency to repo trading that MTS has delivered in the cash market,” said Eldad Fresher, CFO, Mizrahi Tefahot Bank. “Mizrahi Tefahot is committed to the growth of the Israeli government bond market and the creation of MTS’s repo platform will facilitate the market’s continued development.”
“The introduction of an electronic repo market for shekel-denominated products is significant in that for the first time, dealers and investors alike will have the ability to execute repo transactions on Israeli bonds and will, in addition, reap the benefits afforded by electronic trading,” said Michal Rotlevi, head of fixed income trading at Bank Hapoalim. “We thus welcome the opportunity to participate in this new market.”
Cash volumes on MTS Israel have risen significantly since its launch in September 2006 to reach the equivalent of €7 billion (38.5 billion shekels) in the second quarter of 2007, representing growth of 149% from the first full quarter of operation. For the first six months of 2007, volumes totaled the equivalent of €12.5 billion (86.3 billion shekels).
Participants on the MTS cash market include the Israeli Primary Dealers: Bank Hapoalim, Bank Leumi, Migdal Stock Exchange Services, Citibank NA, Clal, Deutsche Bank AG London, Excellence Nessuah Brokerage Services Ltd., First International Bank of Israel, Goldman Sachs International, Israel Discount Bank, Lehman Brothers International Ltd., Merrill Lynch International, Mizrahi Bank, Morgan Stanley & Co. International plc, Poalim Sahar, Standard Bank, U-Bank, UBS Limited and Union Bank.
In addition to the Primary Dealers of Israel, the MTS repo market will also allow for participation by other local and international institutions, including buyside firms.