STOCK MARKET IN TURKEY

BY:-SALMAN AGHA

What is Stock Market A stock market or equity market is a public entity (a loose network of economic

transactions, not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

The size of the world stock market was estimated at about $36.6 trillion at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event notoccurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

Market participants include individual retail investors, institutional investors such as mutual funds, banks, insurance companies and hedge funds, and also publicly traded corporations trading in their own shares. Some studies have suggested that institutional investors and corporations trading in their own shares generally receive higher risk-adjusted returns than retail investors.

Introduction

The Borsa Istanbul (abbreviated as BIST) is the sole exchange entity of Turkey combining the former Istanbul Stock Exchange (ISE) (Turkish: İstanbul Menkul Kıymetler Borsası, IMKB), the Istanbul Gold Exchange (Turkish: İstanbul Altın Borsası, İAB) and the Derivatives Exchange of Turkey (Turkish: Vadeli İşlem Opsiyon Borsası, VOB) under one umbrella. It was established as an incorporated company with a founding capital of  423,234,000 (approx. US$240 million) on April 3, 2013, and began to operate on April 5, 2013. Its logo will be the traditional Ottoman mark for Istanbul, the tulip. Its slogan will be “worth investing”.

Shareholders of Borsa Istanbul are: 49% Government of Turkey, 41% IMKB, 5% VOB, 4% IMKB members, 1% IMKB brokers and 0.3% IAB members. It is planned that all the Government-owned shareswill be offered for sale. Among the executives of the nine-member board of directors, which is presided by former chairman of ISE İbrahim Turhan, are former deputy chairman of ISE Osman Akyüz, former head of VOB Işınsu Kestelli, Merrill Lynch Investment Bank General Manager Hüseyin Kelezoğlu and Chairman of Turkish Association of Capital Market Intermediary Institutions Attila Köksal

History

The Istanbul Stock Exchange (ISE) was the only corporation in Turkey for securities exchange established to provide trading in equities, bonds and bills, revenue-sharing certificates, private sector bonds, foreign securities and real estate certificates as well as international securities. The ISE was founded as an autonomous, professional organization in early 1986. It is situated in a modern building complex in the quarter of İstinye, on the European side of Istanbul, since May 15, 1995. The chairman and chief executive officer of the ISE is Dr. İbrahim Turhan, who was appointed by the government on January 1, 2012.

ISE is home to 320 national companies. Trading hours are 09:30–12:30 for the first session and 14:00–17:30 for the second session, on workdays. All ISE members are incorporated banks and brokerage houses.

ISE price indices are computed and published throughout the trading session while the return indices are calculated and published at the close of the session only. The indices are: ISE National-All Shares Index, ISE National-30, ISE National-50, ISE National-100, Sector and sub-sector indices, ISE Second National Market Index, ISE New Economy Market Index and ISE Investment Trusts Index. The ISE National-100 Index contains both the ISE National-50 and ISE National-30 Index and is used as a main indicator of the national market.

Early days of the securities market in Turkey

The origin of an organized securities market in Turkey has its roots in the second half of the 19th century. The first securities market in the Ottoman Empirewas established in 1866 under the name of "Dersaadet Securities Exchange" following the Crimean War. Dersaadet Exchange also created a medium for European investors who were seeking higher returns in the vast Ottoman markets. Following the proclamation of the Turkish Republic, a new law was enacted in 1929 to reorganize the fledgling capital markets under the new name of "Istanbul Securities and Foreign Exchange Bourse".

Soon, the Bourse became very active and contributed substantially to the funding requirements of new enterprises across the country. However, its success was clouded by a string of events, including the Great Depression of 1929 and the impending World War II abroad which had taken their toll in the just developing business world in Turkey. During the industrial drive of the subsequent decades, there was a continuous increase in the number and size of joint stock companies, which began to open up their equity to the public. Those mature shares faced a strong and growing demand from mostly individual investors and some institutional investors.

The early phase of the 1980s saw a marked improvement in the Turkish capital markets, both in regard to the legislative framework and the institutions required to set the stage for sound capital movements. In 1981, the "Capital Market Law" was enacted. The next year, the main regulatory body responsible for the supervision and regulation of the Turkish securities market, the Capital Markets Board based in Ankara, was established. A new decree was issued in October 1983 foreseeing the setting up of securities exchanges in the country. In October 1984, the "Regulations for the Establishment and Functions of Securities Exchanges" was published in the Official Gazette. The regulations concerning operational procedures were approved in the parliament and the Istanbul Stock Exchange was formally inaugurated at the end of 1985.

Memberships of ISE

The ISE is a full member of World Federation of Exchanges (WFE), Federation of Euro-Asian Stock Exchanges (FEAS), International Securities Services Association (ISSA), International Capital Market Association (ICMA), European Capital Markets Institute (ECMI), World Economic Forum (WEF), Federation of European Securities Exchanges (FESE) and An affiliate member of International

Organization of Securities Commissions (IOSCO).

CMB 30 YEARS

Established in 1981, a result of the enactment of the Capital Market Law No. 2499, the first regulatory and supervisory board of the Capital Markets Board of Turkey (CMB ) is celebrating 30th years of age. Assembly 30 on the occasion of the anniversary of the event titled'','' Financial Markets Regulatory Reform, and according to the information provided, the arrangements began in the 1980s as a result of continuing the process of Turkey entering the rapid development of the capital markets, there was a significant improvement on both primary and secondary markets. In this context, Number of shares of companies traded in the Istanbul Stock Exchange was founded at the end of 1986 was 80 at the end of 2011 was 371'e. annual trading volume of stocks traded on the Istanbul Stock Exchange in 1986, 9 million ($ 13 million), while 694 billion 876 million TL in 2011 (423 billion 584 million dollars), respectively. First established in 1987, 590 by the end of 2011, the number of investment funds, portfolio value of 27 billion pounds (48.6 billion dollars) reached. A total of 56 foreign investment fund, while the total value of their shares in circulation in Turkey of 55 million pounds (31 million U.S. dollars). Turkey's private pension system came into operation in 2003. As of the end of 2011 there are 165 pension funds, reaching a total value of 14.3 million pounds of funds (7.9 million). first established in 1991 by the end of 2011, the number of securities investment trusts 27, while the market value of 690 million pounds (383 million) increased. 2,011 by the end of the CMB was a record number of partnerships 634.Including brokerage firms and banks 100 40 89 140 active intermediary institutions, portfolio management companies 32, 92 independent auditing firm, and 110 pieces of 6 ratings company's real estate appraisal company. outstanding securities of the private sector share of total securities As of the end of 2011 rose by 23 per cent. 

In 2011 a total of 27, including 3 real estate investment trust subsidiary performing IPO, capital markets, public offerings total of 1.3 billion pounds (840 million dollars), funding was provided. Central Registry System and the market value of securities in dematerialized form in December 2011 followed amounted to 426 billion pounds from 109 million the total number of investors in a balance rose to 3 million 709 thousand 819'a. 2011, 31.8 billion pounds (19.5 billion dollars), the domestic, 17.8 billion pounds (108 billion dollars) abroad, including 49.6 billion pounds (30.3 billion dollars) debt instrument was issued. 3 times the current market value in 2023 is expected to reach.

Present Scenario

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