Overview
Announcements

Methodology Change | Solactive – B-BRE Israel Commercial Real Estate Index | Effective Date 26 January 2024

Solactive announces the following changes to the methodology of the following indices (the ‘Affected Indices’):

Name RIC ISIN
Solactive – B-BRE Israel Commercial Real Estate Index .SOBBREIL DE000SLA2BB5

Rationale for Methodology Change

The Affected Indices provide exposure to companies listed on the TASE exchange. These companies serve as a starting universe. Due to changes in the rebalance schedule of the starting universe, Solactive determined to adjust the schedule of Selection Day and Rebalance Day for the Affected Indices to ensure tradability of the companies of the universe.

Changes to the Index Guideline

The following Methodology changes will be implemented in the following points of the Index Guideline (ordered in accordance with the numbering of the affected sections):

1. Section 1.5. – Weighting

From (old version):

[…]

After the close of the Selection Day each Index Component of the Solactive – B-BRE Israel Commercial Real Estate Index is weighted according to the following rules:

For each of the member companies three coefficients are used, two calculated by the Index Committee and the 3rd provided by the TASE:

  • c1 = real estate assets in Israel / total real estate assets     (0≤ c1 ≤1)
  • c2 = total real estate assets / total assets     (0≤ c2 ≤1)
  • c3= floating market cap coefficient (0≤ c3 ≤1)

c1 and c2 are updated once a year in May according to the annual financial reports.

c3 is updated by the TASE and it affects the weights of the companies twice a year on the Adjustment Day, i.e. all 3 coefficients remain constant between Adjustment Days.

The weight of each index component as of the Selection Day is calculated as follows:

mcap(i) – the company’s closing market cap at the Selection Day, as reported by TASE or commercial data vendors.

[…]

To (new version):

[…]

After the close of the Selection Day each Index Component of the Solactive – B-BRE Israel Commercial Real Estate Index is weighted according to the following rules:

For each of the member companies three coefficients are used, two calculated by the Index Committee and the 3rd provided by data vendors:

  • c1 = real estate assets in Israel / total real estate assets     (0≤ c1 ≤1)
  • c2 = total real estate assets / total assets     (0≤ c2 ≤1)
  • c3= free float (0≤ c3 ≤1)

c1 and c2 are updated once a year in May according to the annual financial reports.

c3 is updated by data vendors and it affects the weights of the companies twice a year on the Adjustment Day, i.e. all 3 coefficients remain constant between Adjustment Days.

The weight of each index component as of the Selection Day is calculated as follows:

mcap(i) – the company’s closing market cap at the Selection Day, as reported by data vendors.

[…]

 

2. Section 2.1. – Selection of the Index Components

From (old version):

The initial composition of the Index as well as any ongoing adjustment is based on the following rules:

All companies added to the SOBBREIL index must satisfy the eligibility requirements outlined below:

  1. Companies must be listed on the TASE.
  2. Free Float Market Capitalization needs to be at least 20%.
  3. Companies must be included in the TASE’s “Real Estate and Construction” Index which includes all listed companies in the sector.

[…]

To (new version):

The initial composition of the Index as well as any ongoing adjustment is based on the following rules:

All companies added to the SOBBREIL index must satisfy the eligibility requirements outlined below:

  1. Companies must be listed on the TASE.
  2. Free Float Market Capitalization needs to be at least 15%.
  3. Companies must be included in the TASE’s “TA – Real Estate” Index which includes all listed companies in the sector.

[…]

 

3. Section 2.2. – Ordinary Adjustment

From (old version):

The composition of the Index is ordinarily adjusted two times a year on the close of business of the first Thursday of February and August, provided that this day is a trading day on both the Tel Aviv Stock Exchange and the New York Stock Exchange. If this day is not a trading day on either of these exchanges, the index adjustment is postponed to the next day that is a trading day on both exchanges.

The composition of the Solactive – B-BRE Israel Commercial Real Estate Index is reviewed on the Selection Day and necessary changes are announced.

Additionally, the index is reweighted once a year in February. Updates to the TASE’s list of eligible companies (Tel Aviv Composite) are taken into account. C3 is updated and weights are updated accordingly as of the Adjustment Day.

To (new version):

The composition of the Index is ordinarily adjusted two times a year on the close of business of the first Thursday of May and November, provided that this day is a trading day on both the Tel Aviv Stock Exchange and the New York Stock Exchange. If this day is not a trading day on either of these exchanges, the index adjustment is postponed to the next day that is a trading day on both exchanges.

The composition of the Solactive – B-BRE Israel Commercial Real Estate Index is reviewed on the Selection Day and necessary changes are announced.

Additionally, the index is reweighted once a year in Novermber. Updates to the TASE’s list of eligible companies (Tel Aviv Composite) are taken into account. C3 is updated and weights are updated accordingly as of the Adjustment Day.

 

4. Section 4. – Definitions

From (old version):

“Adjustment Day” is the first Thursday of February and August.

To (new version):

“Adjustment Day” is the first Thursday of May and November.

 

From (old version):

“Free Float Market Capitalization” is with regard to each of the shares in the Universe on a Selection Day or Adjustment Day the value published as the Free Float Market Capitalization for this day. As at the date of this document Free Float Market Capitalization is defined as the value provided by TASE.

To (new version):

The “Free Float Market Capitalization”is with regard to each of the securities in the Universe on a Selection Day the share class-specific free float market capitalization. It is calculated as the multiplication of the shares outstanding in Free Float (as sourced from data vendors) with the closing price of the share class as of the respective Selection Day.

The “Free Float”is with regard to each of the securities in the universe on a Selection Day the share class-specific fraction of the total number of shares of such share class issued that are available for trading by market participants and not locked-in by long term holders, as sourced from data vendors.

 

 

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices.