Capital markets on eve of consolidation

ISTANBUL - Anatolia News Agency

The Istanbul bourse should be an umbrella body providing a single gateway to investors, who want to access capital markets of Turkey, says İMKB’s İbrahim Turhan. AA photo

The total market capitalization of firms traded on the Istanbul Stock Exchange (İMKB) is about $250 billion, said IMKB President İbrahim Turan yesterday in his first press conference since his term started at the beginning of this year. He also said capital markets in Turkey need “serious” consolidation.

The market capitalization figure is about one-fourth of the national income at purchasing power parity, which is very low compared to the group of countries that Turkey belongs to.

Turhan said the goal is to raise this ratio to 80 percent. “We have to aim for a market of $1 trillion dollars given the estimated national income of $1.23 trillion by 2023. We aim for 1,000 firms on the IMKB in five years to achieve this target.”

“It is very important to present the İMKB, the Turkish Derivatives Exchange, the Istanbul Gold Exchange and bourses which may be established in the future to investors on a common trading platform, from a single access point, through a single settlement and custody system and a single regulatory frame,” he said, adding that this is the most significant factor in completing the Istanbul Finance Center Project by enabling the integration of the İMKB with other bourses in the region.

The İMKB is the tenth bourse among developing countries’ in terms of trading volume, he also said. But in capitalization-weighted indexes, the performance of the bourse drops.

The İMKB signed a protocol with the Korea Stock Exchange to connect both stock markets, Turhan said, adding that a common index will be established with the Vienna Stock Exchange.

The Saudi Arabia Stock Exchange and the İMKB will take notable steps soon for cooperation between the two bourses, he added.

The inflation rate nearing 5 percent in the medium term will pave the way for capital markets in Turkey, he said, adding that this official inflation target is achievable.

The value of transactions during the last two years amounted to $420 billion, and the figure for the first four months of the year is $124 billion, Turhan said.

Representatives of the Russell 20-20 Association, commanding a whopping $9.5 billion in funds, will come to Istanbul this fall in effort to promote the Turkish equity markets, he said, adding that an Asian Stock Exchanges Summit is planned for this year.
More than 60 percent of the stocks traded on the İMKB belong to foreigners.