FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011 ISTANBUL STOCK EXCHANGE In 2010, the ISE has taken up a number of steps to strengthen the awareness in the Turkish capital market. Huseyin Erkan Chairman & CEO Established on December 25, 1985, the Istanbul Stock Exchange (ISE) celebrated its 25th Anniversary in December 2010. We are proud to have fulfilled the mission of contributing to the development of the Turkish economy during the last quarter of a century. As one of the key components of the Turkish financial system with its market capitalization of US$ 308 billion and high growth potential, the ISE aims to become a regional financial centre in the near future. In 2010, the ISE has taken up a number of steps to strengthen the awareness in the Turkish capital market. In cooperation with the Capital Markets Board of Turkey (CMB), the Union of Chambers and Commodity Exchanges of Turkey (TOBB), and the Association of Capital Market Intermediary Institutions of Turkey (TSPAKB), we initiated the Initial Public Offering Campaign in order to increase the number of initial public offerings to ensure that more companies are able to access the opportunities offered by capital markets. Through this initiative, we aim to attract the largest 1,000 Turkish companies to the ISE while also increasing the awareness of small and medium sized enterprises about capital markets. The first extensive occasion for this purpose was the “IPO Istanbul Summit” held in Istanbul in May 2010. Similar events were organized in other cities of the country as well. Thanks to these efforts, 22 IPOs were made in 2010, raising a total amount of USD 2.1 billion funds for companies. In addition to IPOs, 15 corporate bonds were issued in 2010, generating funds totaling USD 1.3 billion. Besides stimulating the supply-side, we also plan to initiate an “Investor Campaign” to attract new investors to capital markets in 2011. Our aim is to achieve 7,500,000 investors, which is equal to 10 percent of Turkey’s population, in 2023 when we will be celebrating the centennial anniversary of the Republic of Turkey. During the past year, we introduced two new indices, namely Energy and Participation Indices. The Participation Index is created to appeal to especially religious and ethically conscious investors. In 2011, we plan to launch the ISE Sustainability Index to encourage companies to adopt socially and environmentally responsible policies. In 2010, the ISE also introduced a variety of new financial instruments, including non-voting shares and warrants, and new markets including Repo Market for Specified Securities, Interbank Repo/Reverse Repo Market, and Offerings Market for Qualified Investors. ISE also established the Emerging Companies Market to allow small and medium sized companies with growth potential to raise funds through a flexible organized platform. As to the performance figures, the ISE-100 Index increased by 21 percent in US$ terms in 2010, compared to year-end value of 2009. The Stock Market maintained its exuberance, with a 35 percent increase in the total traded value, to reach US$ 426 billion. As of year-end 2010, the market capitalization of 338 companies traded on the ISE increased by 30 percent, reaching US$ 308 billion and the share of foreign portfolio investors in the free-floating shares of the ISE stood at 66 percent. During the year, the total traded value of the Outright Purchases and Sales Market increased by 10.3 percent to US$ 298 billion, while the total traded value of the Repo/Reverse Repo Market increased by 4.2 percent to US$ 2 trillion as of end-2010. HISTORY AND DEVELOPMENT In 1981, the Capital Market Law was enacted and one year later, the Capital Markets Board was established. In October 1984, the Parliament approved the Regulations for the Establishment and Operations of Securities Exchanges, which paved the way for the establishment of the ISE, formally inaugurated in 1985. The ISE provides a fair and transparent environment for trading of a wide variety of securities namely, stocks, exchange traded funds, warrants, government bonds, Treasury bills, corporate bonds, money market instruments (repo/reverse repo), foreign securities etc. Currently, there are four markets operating at the ISE; the Stock Market, the Bonds and Bills Market and the Foreign Securities Market and Emerging Companies Market. In 1989, the foreign exchange regime was amended to allow non-residents to invest in Turkish securities, making the Turkish securities markets open to foreign investors without any restrictions on the repatriation of capital and profits. The ISE was recognized as a “Designated Offshore Securities Market” by the U.S. Securities and Exchange Commission in 1993 and was designated as an “appropriate foreign investment market for private and institutional Japanese investors” by the Japan Securities Dealers Association in 1995. Likewise, the ISE has been approved by the Austrian Ministry of Finance as a regulated market in accordance with the regulations of the Austrian Investment Fund Act in 2000. As a result of all these developments, foreign investors now account for a substantial volume of daily trading and hold around 66% of the publicly-held stocks in their portfolios amounting to US$ 71.4 billion, as of end-2010. The ISE currently owns 32.62% of the ISE Settlement and Custody Bank, 30% of the Central Registry Agency and 18% of the Turkish Derivatives Exchange. On the international level, the ISE has participations in the Kyrgyz Stock Exchange and Baku Stock Exchange with stakes of 24.51% and 5.26%, respectively. FUTURE OUTLOOK • The ISE established the “Emerging Companies Market (ECM)” with an aim to offer a different application procedure to small and medium sized companies (SMEs) for trading on the Istanbul Stock Exchange. In this respect, the ECM will start operating in 2011. In order to contribute to price formation and liquidity, trading on the Emerging Companies Market, different from the continuous auction system on the Stock Market, will be through a combination of single price method and continuous auction with market maker system. The companies traded on the Market, demonstrating progressive performance in time, will have the opportunity to be transferred to any of the submarkets of the ISE Stock Market. • As part of its efforts towards increasing the number of public offerings, the ISE started an IPO Campaign in 2010. The first event of the Campaign was the “IPO Istanbul Summit” held in Istanbul in May 2010. Similar events were organized in other cities of the country in 2010 and will be organized in 2011, as well. Continuing to strive to attract the supply side, this year the ISE will also initiate an “Investor Campaign”, aimed at attracting savings to capital markets. • In 2009, the ISE launched the Greece & Turkey 30 Index (GT-30) jointly with the Athens Exchange and in 2010, the TSKB Energy Index jointly with Industrial Development Bank of Turkey (TSKB). The ISE has plans to introduce new indices jointly with other institutions and other exchanges from around the world. • The ISE is working on launching a Repo Market for Spesific Securities, where the pre-stated government and private sector borrowing instruments will be used in repo/reverse repo trades. Unlike the existing Repo-Reverse Repo Market, in this new market matching will take place according to the ISIN code and the price of the security, in addition to the beginning and ending value dates, repo/reverse repo rate and volume. Securities will be marked to the market by the ISE during the repo term and margin calls will be made when necessary. PAGE 72
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011 ISTANBUL STOCK EXCHANGE OFFICIAL 6 MONTH STATISTICS US$ millions # Shares millions Total Volume Average Daily Volume Total Volume Average Daily Volume Stocks Jul-10 26,638.60 1,210.85 11,817.91 537.18 Aug-10 23,538.84 1,120.90 10,318.62 491.36 Sep-10 32,616.89 1,630.84 14,131.11 706.56 Oct-10 41,247.74 2,062.39 19,210.57 960.53 Nov-10 35,930.76 1,996.15 16,248.83 902.71 Dec-10 48,385.14 2,103.70 23,533.03 1,023.18 TOTAL 208,357.97 1,687.47 95,260.07 770.25 Bonds Jul-10 23,746.93 1,079.41 0.03 0.00 Aug-10 20,361.83 969.61 0.03 0.00 Sep-10 20,132.93 1,006.65 0.03 0.00 Oct-10 25,585.95 1,279.30 0.03 0.00 Nov-10 20,175.00 1,120.83 0.02 0.00 Dec-10 29,582.30 1,286.19 0.03 0.00 TOTAL 139,584.94 1,123.66 0.17 0.00 Other Jul-10 184,831.45 8,401.43 0.07 0.00 Aug-10 172,154.99 8,197.86 0.07 0.00 Sep-10 147,357.37 7,367.87 0.06 0.00 Oct-10 153,239.94 7,662.00 0.06 0.00 Nov-10 139,218.08 7,734.34 0.05 0.00 Dec-10 155,655.05 6,767.61 0.06 0.00 TOTAL 952,456.88 7,688.52 0.37 0.00 Market Capitalization (US$ millions) Index MONTHLY STOCK VOLUME VS INDEX (US$ millions) Stocks Index MONTHLY MARKET CAPITALIZATION (US$ millions) Jul-10 277,047.49 2,317.22 Aug-10 276,554.92 2,296.27 Sep-10 320,031.62 2,653.55 Oct-10 350,183.95 2,799.83 Nov-10 306,061.43 2,538.44 Dec-10 307,551.31 2,499.75 CONTACT INFORMATION 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 3,000 400,000 2,500 350,000 300,000 2,000 250,000 1,500 200,000 1,000 150,000 100,000 500 50,000 0 0 Jul Aug Sep Oct Nov Dec Jul Aug Sep Oct Nov Dec Contact Name Mr. Eralp Polat E-mail international@imkb.gov.tr Website www.ise.org PAGE 73
Change language