JUNE 2013 - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013
ISTANBUL GOLD EXCHANGE
Osman Sarac
Chairman
Istanbul Gold Exchange targets to stimulate
local business and international attention with
all other globally competitive enterprises which
will provide Turkey to be a central hub for the
gold business, due to its strategic position, as
it lies in the heart of a major gold trade area,
exposed to Middle East, Europe and Gulf
States.
For the integration of the Exchange to the
international markets, there have been
important steps since 2007. In March 2008 we
have been an associate member to London
Bullion Market Association, by May 2008 we
have joined World Federation of Diamond
Bourses, by February 2010, we are honored
to be part of a large family with distinguished
members, FEAS as an affiliate member. The
Exchange became a member of the Kimberley
Process Certification Scheme (KPCS), in
August 2007, which aims to curb the flow
of conflict diamonds, with 49 participants
worldwide.
The Turkish gold jewelry market has undergone
a major revival since the early 1990s with the
traditional and long-standing historical affinity
for gold jewelry adjusted for modern tastes.
Turkey is now the world’s fourth largest market
for gold jewelry, third largest manufacturing
centre and second biggest exporter.
Istanbul Gold Exchange targets to
stimulate local business and international
attention with all other globally competitive
enterprises which will provide Turkey to be
a central hub for the gold business.
The annual gold export from Turkey reached
record levels in 2012. Due to the information
received from Turkish Statistical Institute, it
has reached US $ 16,3 billion, part of gold
bars and other way of direct jewelry export to
retailers, wholesalers abroad and sales to the
tourists visiting Turkey last year. Due to Turkish
Exporters Assembly, direct jewellery export
reached to US $ 2,1 billion with a rise of 42%
y-o-y. The rest of the export figures represents
flow of gold bars from Turkey to other countries
with an amount of US $ 14,2 billion with a rise of
528% y-o-y (In 2011 bullion export figures was
US $ 2,26 billion).
As a first spot trading gold exchange in the
world. IGE was founded with the principle
semi-electronic system trading floor. By 2009.
a new screen-based fully electronic trading
system has been launched with remote
access in order to provide investors 24 hours
trading. By August 2012, 24 hours internet
based electronic system was introduced to the
markets.
Central Bank Statutory Reserves
The Central Bank of Turkey, has announced a
legislation for the statutory reserves for gold.
Year Gold Silver
Import (ton) Transaction (ton) Import (ton) Transaction (ton)
2002 128,9 143,06 139,1 216,73
2003 213,64 237,37 155,5 272,23
2004 250,93 280,81 209,5 318
2005 269,48 328,75 207,9 362,82
2006 192,72 247,48 107,4 277,41
2007 230,79 328,38 93,37 320,88
2008 165,9 337,03 73,6 151,71
2009 37,59 226,63 5,59 382,67
2010 42,49 115,19 19,69 388,67
2011 79,97 227,05 41,8 408,08
2012 120,78 312,1 142,2 437,2
Gold Figures
The annual gold import of Turkey in 2012 was
estimated at US $ 8,2 billion due to Turkish
Statistical Institute, partially from gold bars and
other way of direct jewelry import to retailers.
Istanbul Gold Exchange members have realized
as 120,8 tons of import with the amount of US
$ 6,1 billion in the Exchange with a rise of 41,1
tons from 2011 which represented a rise of 51%
y-o-y. The gold trading volume reached 312,1
tons with the amount of US $ 15,9 billion by
2012 with a rise of 85,1 tons from 2011 which
represented a rise of 37% y-o-y.
The annual silver import of Turkey in 2012
through Istanbul Gold Exchange members
was 142,2 tons with the amount of US $ 141,7
million with a rise of 100,1 tons from 2011 which
represented a rise of 237% y-o-y. The silver
trading volume reached 437,2 tons with the
amount of US $ 435 million by 2012, with a rise
29,1 tons from 2011 which represented a rise
of 7% y-o-y.
By the increase of gold prices since 2007
huge amount of gold came to the market as
scrap and Turkey turned to be an exporter of
gold in the market. The supply of scrap gold
to the market continued in 2012 and an annual
amount of 80-90 tons of gold was supplied to
the market.
In 2012 the gold demand by consumers
through banking system saw high increases.
By the recent years there is a raise of individual
and corporate demand in gold and silver as
investment and mutual funds and gold deposits
tool in banking system as well as jewelry sector.
Istanbul Gold Exchange is having a role of
safeguard for gold funds and gold ETF which
is listed in ISE. At the end of 2010 there were
around 6.000 kilos of gold kept in the Exchange
on the name of the 24 funds. At the end of
2011 the number of funds and the amount of
gold kept in the Exchange vault rose also. By
end of 2012, 10.637 kg of gold belonging to
2 Gold ETF, 47 Mutual funds were kept in the
Exchange Vault.
Due to the legislation banks have to present
some percentage of their gold deposits (9-
11%) to Central bank accounts and optionally
they may hold some percentage of their TL
or forex deposits statutory reserves in gold.
By November 2012, there is about US $ 9,1
billion gold deposits in banking system which
represents around 180 tons of gold. The total
gold held by Central Bank as gold and other
assets’ statutory reserves is totaled around 240
tons which is mostly kept in Bank of England.
By December 2012, Central Bank, statutory
reserves of the banks started on schedule to
be kept in IGE under the account of TR Central
Bank. By December 2012, 547,56 kg of gold
has been kept under the account of Central
Bank in IGE vault.
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