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UPDATE 1-Tel Aviv Stock Exchange goes public, shares surge

Steven Scheer

(Adds details, CEO comment)

JERUSALEM, Aug 1 (Reuters) - The Tel Aviv Stock Exchange transformed into a public company on Thursday after completing a long awaited initial public offering that valued the bourse at 710 million shekels ($202 million).

Joining a global trend, the Israeli exchange sold nearly 32% of its shares at 7.1 shekels per share. They jumped 30% in their first hours of trading to 9.25 shekels in heavy turnover.

The TASE, founded 66 years ago, said the IPO drew demand from institutions, mostly global investors.

Itai Ben-Zeev, the TASE's chief executive, said the bourse will operate more transparently and responsibly.

"We hope we have paved the way for other Israeli companies seeking to issue on the Tel Aviv Stock Exchange with an offering that includes large international investment entities alongside local investors," he said.

"Such a global offering has many benefits to Israeli companies in terms of their valuation and the diversity and number of investors."

Last year, TASE -- which has lost 40% of investors since 2010 -- sold nearly a 20% stake to investment fund Manikay Partners and another 19% to four other foreign investors. That sale valued the exchange at 551 million shekels.

With 447 traded companies at a market value of $215 billion, the TASE has been struggling with delistings and declining trading volumes.

In the first half of 2019, daily trading averaged 1.2 billion shekels.

The TASE earned 5.4 million shekels in the first quarter, down from 8.1 million a year earlier, citing lower revenue and higher expenses. Revenue slipped 2% to 64.6 million shekels.

It plans to distribute 30-50% of its ongoing profit starting in 2020 as a dividend.

($1 = 3.5217 shekels) (Reporting by Steven Scheer; Editing by Tova Cohen and David Evans)

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