SAFAKNA TURKEY – The Borsa Istanbul BIST 100 index after closing for 5 trading days rose to 4,951 points compared to last week’s close. Will the stock market continue to rise? Here are the details…
Economist Hikmet Baydar, who made a statement on the issue to millyet.com.tr, said: “Some measures have been taken. These measures are aimed at both increasing demand from institutional investors and increasing demand from individual investors trading in the stock market. In addition, decisions were made to motivate companies and banks to buy back their own shares.
Especially with the temporary removal of the withholding tax, giving companies this option to buy shares has forced companies to announce buybacks of their shares.
“NEED TO BUY SHARES WORTH 10 BILLION TL”
In addition, the increase in the minimum obligation on shares of the state contribution fund from 10 percent to 30 percent in PPS created the need to purchase shares of pension funds worth 10 billion Turkish lira within 10 days. When the Turkish Wealth Fund also faced excessive volatility, it was decided to install a regulatory mechanism in the market.
Thus, it was ensured that BES funds were required to purchase shares, so that the Wealth Fund could trade, and that companies and banks were allowed to buy back their shares (share buybacks for banks would not be temporarily deducted from equity when calculating capital ratios). On the one hand, banks and publicly traded companies were able to own their shares.
At the same time, pension funds were required to buy shares. The wealth fund will also trade on the market.
“ATTRACTION OF INSTITUTIONAL INVESTORS TO THE MARKET”
All this attracts institutional investors to the market, and also makes it possible to own shares of companies against the background of falling prices for shares of companies listed on the exchange. None of them is mandatory, only BES is mandatory, other things can happen with the consent of the companies themselves.
“WE RETURNED LOSSES AFTER THE EARTHQUAKE”
When you look at all of them, the current rise in the stock market can be explained. The measures taken provoked growth. The stock market recovered its losses after the earthquake. We’ll see over time if this continues.
“HE GOT A BONUS OF ALMOST 10 PERCENT”
Ata Yatırım Domestic Markets Director Şükrü Cem Kaya used the following statements in a statement: “As the unusual price movements that occurred after the earthquake turned into panic selling, Borsa Istanbul canceled its transactions on Wednesday and stopped transactions. When the measures taken maintained the balance of demand and supply in the market on the demand side, the market increased the premium by almost 10% daily. While these measures are effective so far, they are not sustainable. We face serious uncertainties. For this reason, the small investor should see this move as an opportunity and mitigate the risk by dissipating it. Buyout decisions of companies are not binding. While these decisions take effect after opening, companies will be hesitant about high prices.
Dollar/TRY continues to move in a horizontal band for a long time. Despite the earthquake, data from the US and uncertainty about the upcoming period, this trend continues. However, as long as we remain above 18.80, upward momentary swings must be accepted as normal. The expectation in the market is that this trend will continue until the election.”
“WE BELIEVE THE STRONG RISE HAS RETURNED PERCEPTION TO THE EXCHANGE TOTALLY”
Aishin Erdem, Chairman of the Board of Dynamic Investment Securities, used the following statements in her statement: “We welcome the fact that Borsa Istanbul is trading at a premium of almost 10%, taking into account the measures taken after a 5-day break. Although issues have come to the fore since the first release of the measures, we believe that the large share purchases announced by companies and the strong rise in the MSCI Turkey index yesterday have completely changed perceptions in the stock market.
There was an increase in the dollar to 19.12 during a period when only Asian markets were open, but it was not possible to achieve consistency. We have rarely seen such movements in the past. We believe that such movements, which occur in shallow periods of time, do not affect the market.”
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