JERUSALEM, May 16 (Reuters) - The Tel Aviv Stock

Exchange (TASE) is planning to alter its schedule and add Friday

to the trading week in a bid to strengthen the Israeli bourse's

global profile, it said on Thursday.

The exchange hopes a decision to shift away from Israel's

Sunday to Thursday work week to one that overlaps more with Wall

Street and European bourses will win inclusion in global index

provider MSCI's Europe category.

The announcement comes as shares have recovered from the

Oct. 7 Hamas attack on Israel that pushed the broad Tel Aviv 125

index down 12% in October. The index is now up 8% since

Oct. 5, although MSCI's index of world shares

has risen more than 20% over the same period.

Reassigning Israel to a new region like Europe could

open the door to more passive inflows for the Israeli capital

markets, but MSCI in 2022 rejected shifting the country to a new

region, citing differing market trading days as a key reason.

MSCI, which provides equity, fixed income and hedge fund

indexes, upgraded Israel to a developed market from an emerging

one in 2010.

Under the TASE's proposal, in collaboration with the Israel

Securities Authority and Bank of Israel, trading would move to

either Monday through Friday or Sunday through Friday in which

trading on Sundays would begin at 12.00 local time (0900 GMT).

Trading volume on Sundays is usually far lower than the rest

of the week and trading ends 90 minutes earlier on that day.

It was yet to be decided how extended trading would fit

around the start of Shabbat - the Jewish sabbath - on Friday

afternoon when most Israeli businesses close.

The shekel currency, however, is already traded on

Fridays and more services keep running during Shabbat in Tel

Aviv than in most other Israeli cities.

The TASE asked that public comments on the plans be

submitted by June 30.

In January, Israel's securities regulator told Reuters that

Israel would eventually move to a Monday to Friday trading week

in order to be included in the MSCI Europe category.

The TASE noted that currently, after trading ends in Israel

on Thursday afternoon, trading on international exchanges

continues for two more sessions.

"It effects on local participants and particularly on global

investors, who consistently stress that the unique trading

methods in Israel pose a real hindrance," the bourse said,

adding that local investors remain exposed to fluctuations on

those two days and can only address them on Sunday.

"Aligning TASE's trading days to global standards would help

improve the accessibility of the local market to active and

passive international investors and international primary

dealers, which is likely to enhance liquidity in the local

market," it said. "The participation of global investors in the

local capital market is crucial for both local companies and the

Israeli economy."

In addition to facilitating Israel's inclusion in the MSCI

Europe index, the change would also mean an additional trading

day for government bonds.

"The potential overall benefits could increase international

activity, enhance market liquidity and enable local

institutional investors to increase their activity on the local

capital market, encouraging other local participants to join

in," the TASE said.