2021 could be year of IPOs for BİST, says official

ISTANBUL

As 700,000 domestic investors opened accounts at Borsa Istanbul (BİST) in 2020 and foreign investor flows returned since early November 2020, well over 20 initial public offerings (IPOs) can take place this year, according to the Turkish Capital Markets Association (TSPB) head Tevfik Eraslan.

“I’ve been hearing of many companies from various sectors evaluating this subject. We will face not only 20 or 24, but way more IPO figures in the upcoming period,” Eraslan told daily Dünya yesterday.

Eraslan recalled that 700,000 new domestic investors opened accounts to conduct transactions on the BİST trade sessions last year.

On the other hand, foreign investor inflows toward the stock market and other Turkish investment areas totaled some $15 billion since Turkish President Recep Tayyip Erdoğan overhauled his economy management team and pledged market-friendly economic and political reforms in early November 2020.

“Large scale companies will explore IPO opportunities as both foreigners and domestic individual investors have a keen interest [on BİST],” said Eraslan.

“In the years 2019 and 2020, we saw IPOs of relatively small companies, and they had very fruitful results. We now expect that large-scale companies could join them in 2021,” he added.

Eraslan stressed that with the new monetary and fiscal policies Turkey could be attractive for international investors as major central banks have promised to keep historically low-interest rates in place for a couple of years.

The shares of Turkish companies are very cheap compared to those of other emerging market peers, he said, pointing to another reason to expect foreign money inflows.

[HH] M&A volume at $9 bln in 2020

The volume of mergers and acquisition (M&A) transactions in Turkey reached $9 billion in 2020, said audit and consulting giant Deloitte Turkey yesterday.

Last year, the M&A volume increased by 70 percent on an annual basis, while a total of 304 M&A transactions - a historic high - were seen in 2020, the consulting firm said in a press release.

Kıvanç Çıdam, a financial expert from Deloitte Turkey, said after a decline in M &A transactions in 2019, the record number of transactions in 2020 showed that investors’ interest in Turkey has increased significantly.

Highlighting that mega transactions constitute 40 percent of the total volume, the press release recalled that the first “unicorn” Peak Games was purchased by the U.S.-based firm Zynga for $1.8 billion, and Turkey Wealth Fund consolidated several insurance firms worth $953 million under an umbrella brand.

During 2020, 82 M&A transactions were made by foreigners worth $4.6 billion, the press release stated, adding that the interest of foreign investors, which made 51 percent of total transactions in Turkey, continued during the pandemic.

Among foreign investors, European investors made 47 transactions worth $1.2 billion, followed by investors from North America (13 transactions), and Qatar (4 transactions).

The release also said that the start-up ecosystem continued to improve in Turkey last year when 134 transactions worth $200 million were made by venture capital funds and angel investors.