Why to Invest in yTurkDEX?

May, 2009

ContentContentss

1 A B i f I t d ti t T kDEX1. A Brief Introduction to TurkDEX2. Why to Invest in TurkDEX?3. Market Statistics4. TurkDEX World Standing 5. New Products and Projects

Part 1

A Brief Introduction to TurkDEX

“First and Only” Derivatives Exchange in TurkeyExchange in Turkey

TurkDEX Inc. is the only entity authorized by theTurkDEX Inc. is the only entity authorized by the Capital Markets Board (regulatory agency in Turkey) to launch a derivatives exchange in Turkeylaunch a derivatives exchange in Turkey.

A Single Market Place forA Single Market Place forDerivatives in Turkey

Timeline

TurkDEX has 87 members.

According to FIA 2008 1st half data, TurkDEX is theworld’s 20th exchangeaccording to future

Record trading volume: TRY 1 billion 645 million.

acco d g to utu econtracts’ trading volume.

The value of open interest exceeded TRY 1 billion.

million.

Th l l i i t t d i ti

The opening bell rang with 34 members.

Trading volume exceeded TRY 1 billion.

The legal permission to operate a derivatives exchange was received from CMB.

TurkDEX was set up as a corporation.

The legislation on “The Establishment and Operation of Futures and Options Exchanges” was published in the Official Gazette.

Well-Defined Corporate Structure

TurkDEX is a for-profit company dedicated to expand the trading volume and range of productsand range of products.

The shareholders of TurkDEX include established financial and real sector institutions of Turkey.

TThehe Union of ChambersUnion of Chambers and and Commodity Exchanges of Turkey %25Commodity Exchanges of Turkey %25

y

Istanbul Stock ExchangeIstanbul Stock Exchange %18%18

Izmir Mercantile ExchangeIzmir Mercantile Exchange %17%17

Yapi Kredi Bank %6Yapi Kredi Bank %6pp

AkbankAkbank %6%6

VakVakiif Securities Incf Securities Inc %6%6

Garanti BankGaranti Bank %6%6Garanti BankGaranti Bank %6%6

IsIs Securities Securities IIncnc %6%6

Turkish Association of Securities DealersTurkish Association of Securities Dealers %6%6

T k b kT k b k %3%3TakasbankTakasbank %3%3

SSiinai Kalknai Kalkiinma Banknma Bank %1%1

Electronic Infrastructure

No geographical constraints exist to invest at TurkDEXNo geographical constraints exist to invest at TurkDEX.

T kDEX i f ll l t i h ith tTurkDEX is a fully electronic exchange with remote access.

A l i d i l t ti f t diAnalysis and implementation process of a new trading system which has more functionalities is underway.

TurkDEX Products

FINANCIALSFINANCIALS COMMODITIESCOMMODITIES

Equity Index FuturesEquity Index FuturesISE 30

COMMODITIESCOMMODITIESWheat FuturesCotton FuturesGold FuturesISE-30

ISE-100Gold Futures

Interest Rate FuturesInterest Rate FuturesT-Benchmark Government Bond

Currency FuturesCurrency FuturesUSD/Turkish LiraEURO/Turkish LiraEURO/Turkish Lira

TurkDEX Members

As of February 2009 TurkDEX has 87 membersAs of February 2009, TurkDEX has 87 members

Exchange MembersExchange Members

Clearing membersAll t

Non-clearing membersAll current

members areclearingclearing

members.

Clearing Members can trade both for their own account and for their clients’ account

The Clearing House

Clearing is handled by TAKASBANK, the central clearing institution i T kin Turkey.

Takasbank is also the Clearing and Settlement Center for IstanbulTakasbank is also the Clearing and Settlement Center for Istanbul Stock Exchange.

Takasbank complies with the “Eligible Foreign Custodian” definition of the US SEC (Securities Exchange Commission) and is recognized b th UK SFA (S iti F t A th it ) “A dby the UK SFA (Securities Futures Authority) as an “Approved Depository” and an “Approved Bank.”

Takasbank complies with the standards predetermined by JSCC (Japan Securities Clearing Corporation) and JASDEC (Japan Securities Depository Center).

Part 2

Why to Invest in TurkDEX?

No Regulatory Obstacles for International Investors

No regulatory obstacles exist to trade derivatives for

for International Investors

individual, institutional and international investors.

The single regulatory body for all kind of exchangeThe single regulatory body for all kind of exchange

traded derivatives contracts is the Capital Markets Board

f T k (CMB)of Turkey (CMB).

Safety for Your Trades

TurkDEX is responsible for creating its own rules & regulations but these regulations should comply with Capital Markets Board regulations.

To protect investors and achieve a fair, transparent and an efficient market, Capital Markets Board;

R l d di h E hRegulates and audits the ExchangeReviews and accepts Exchange rulesConducts investigation for market manipulationConducts investigation for market manipulationRegulates and audits Exchange membersReviews and approves new contract listings

Safety for Your Trades

Margining at TurkDEXA t b d f t i i i d t T kDEXAccount-based upfront margining is used at TurkDEX.

Margin levels are determined and adjusted regularly according tomarket conditions.

The total collateral amount as of 31 December 2008 is around 557 million US Dollars.

The Guarantee Fund at TurkDEXThe guarantee fund is established with the paid-in

capital of the clearing members.It is used in case a member defaultsIt is used in case a member defaults.The size of the guarantee fund as of 31 December 2008 is

around 41 million US Dollars.

Tax Incentives for Local and International Investorsand International Investors

TurkDEX is tax free for foreign and domestic investors.TurkDEX is tax free for foreign and domestic investors.

This advantageous tax regime will continue forThis advantageous tax regime will continue for non-resident investors after December 31st, 2008.

There is initiative-taking process underway to extend this regime for domestic investorsto extend this regime for domestic investors.

The Most Liquid Financial Instrument in Turkey

Th ISE 30 i i d f i h li id

Instrument in Turkey

The ISE-30 equity index futures is the most liquid financial instrument within the overall financial system in Turkey.

Small contract size is attractive for all investors (contract size is around $2000).

Investors can trade in large numbers with ease without any short selling constraintswith small bid-ask spreads

Trading at Less Cost and With Easeand With Ease...

TurkDEX offers a low-cost alternative.

TurkDEX offers foreign investors equity exposure in Turkey with a g q y p ysingle transaction.

TurkDEX has a well-defined corporate structure. p

Trading activity at TurkDEX stimulated the OTC market and index equity optionsthe OTC market and index equity options trading soared with the launch of ISE-30 futures.

Part 3

Market Statistics

A Tremendous Growth at TurkDEXat TurkDEX

60 000 000

Yearly Trading Volume (number of contracts)

54.472.835

40 000 000

50.000.000

60.000.000

24.867.033

20.000.000

30.000.000

40.000.000

1.832.8716.848.087

0

10.000.000

2005 2006 2007 2008

A Tremendous Growth at TurkDEXat TurkDEX

162 360 605 347180.000.000.000

Trading Volume (USD)

162.360.605.347

120 000 000 000

140.000.000.000

160.000.000.000

92.923.792.477

80.000.000.000

100.000.000.000

120.000.000.000

2 242 348 63812.251.038.57220.000.000.000

40.000.000.000

60.000.000.000

2.242.348.6380

2005 2006 2007 2008

TurkDEX Trading Volume BreakdownBreakdown

D k V l k B d İ l H i D ğ lTrading Volume Breakdown(2008)

Dayanak Varlık Bazında İşlem Hacmi Dağılımı 2009 (TL)

Equity Index91%

Commodity0%

Equity85%

C dit

Interest Rate0%

Currency9%

Currency15%

Commodity0%

0%

Interest Rate0%

The data provided for 2009 represents the trading volume till 12th of May, 2009p p g y,

Daily Average Trading Volume

Daily Average Trading Volume (in millions of USD)

1.000

1.200

800

6002007

2008

2009

200

400

0

January February March April May June July August September October November December

The data provided for May represents the average trading volume till 12th of May, 2009

Number of Client Accounts

Number of Trading Accounts

50.000

60.000

g

30 000

40.000

20.000

30.000

0

10.000

A f A il 2009 th b f li t t i 47 644As of April 2009 the number of client accounts is 47.644

Part 4

TurkDEX World Standing

TurkDEX Standing Among Derivatives ExchangesDerivatives Exchanges

In 2008 TurkDEX had the 28th highest g

trading volume among other global derivative

exchanges.

In 2007 TurkDEX was 38th.

Source: Futures Industry Association

TurkDEX-TRY/Dollar Futures

Source: FOI

TurkDEX ISE 30 Index Futures

Note: FOI

Part 5

In the Pipeline

New Products

T kDEX i d di t d t d th t di l d fTurkDEX is dedicated to expand the trading volume and range of its products.

New Products to be listed soon include:

Single Stock FuturesSingle Stock Futures

Overnight Interest Rate Futures

I fl ti R t F tInflation Rate Futures

Options

New Projects

I t i th T di S tImprovements in the Trading SystemContinuous efforts are underway to improve the current trading system.

Existing Spot Commodity Cooperation to Improve LiquidityThere is ongoing initiative taking process underway to stimulate t di i th dit d ttrading in the commodity products.

Market-maker system is to be introduced soon in commodity t t h tt t tcontracts, such as cotton contracts.

New Projects

Eliminating Restrictions in Short-Selling in the Equity and Bonds B li i ti h t lli t i ti d i i th h t lliBy eliminating short selling restrictions and improving the short selling

mechanism at both markets, investors will be able to benefit more from arbitrage trades.

Physical Settlement in Currency ContractsTurkDEX is to introduce physical settlement in currency contracts soon.TurkDEX is to introduce physical settlement in currency contracts soon.

Thank you for your kind attention…