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Turkish
Capital Markets
Market
Background
For Turkey
1980's are characterized by attempts toward attaining a more
liberalized economy and integrating with global markets. One
decisive move toward this end was the establishment of the Istanbul
Stock Exchange (ISE). Although the foundation of the exchange dates
back to the first years of the Republic of Turkey, ISE could start
its activities in 1986, after the constitution of the Capital
Markets Board (CMB) in 1981. The performance of the ISE was quite
cyclical in the first six years, booms in 1987 and 1990, crashes in
1988 and 1992.
The ISE
gained a new momentum with the formation of the coalition between
the True Path Party (DYP) and the Social Democratic People's Party
(SHP) Serious measures were taken to stimulate the exchange
activities, the most prominent of these being the tax incentives
brought in 1993 providing an exemption of withholding tax on gains
from mutual funds and investment trusts having at least 25% stock
content ("A" type funds). Ignited by such incentives and the high
growth rate of the economy (7.l6% GNP growth), 1993 happened to be a
year of records both in the index and the trading volume. The index
flourished by 206% in USD based terms; monthly average trading
volume and market capitalization rose north of USD 1,700 mn and USD
37,000 mn respectively. P/E ratio followed a similar route,
increasing from 11 in 1992 to 25.2 in 1993.
With the
advent of 1994, however, Turkey faced the most severe economic
crisis of its history pronounced by three-digit yearly inflation and
devaluation rates, high current account and budget deficits and
rapid accumulation of foreign and domestic debt. Capital markets
were inevitably adversely affected by this development. As a result
of both the heavy devaluation of the TL against the USD and the real
depreciation in the stock prices, the composite index fell by 80% in
USD terms in the first four months of the year. There was a 30% drop
in the P/E and a 64% drop in the market capitalization in the same
period. Having attained a value of USD mn 5,311 in January, the
monthly trading volume fell sharply to USD mn 482 in April, lowest
since November 1992. After the commencement of the stabilization
program in April, however, a revival was observed in the capital
markets. As of the end of August, monthly average trading volume
increased by 126%, market capitalization by 85% and P/E by 72%.l
There was also a dramatic 96% increase in the USD based composite
index but this value is still 58% below the value at the beginning
of the year.
Yarkin CEBECI
Garanti Yatirim ve Ticaret Bankasi A.S.
Return to Business and Economics
Trading and Supplement
Bid or ask
orders are given to the Exchange members principally in written form
on the Istanbul Stock Exchange. Prices are fixed according to the
"limited" or "free" price options. Price is determined by continuous
auction where buyers and sellers indicate their buy and sellers
indicate their buy and sell orders on the boards and a transaction
is enacted when on party checks out, using felt-tipped markers, the
corresponding price of the other party. Also, since December 1993,
orders have been displayed and matched on an electronic trading
system, the ELIT system. At present, 139 stocks of the total 167
stocks traded on the ISE are included in this system and it is
planned that all of the firms will be embraced before the year end.
Shares are traded in lots, each lot representing 1,000 shares. All
transactions conducted on the floor are entered in the computer and
fed into Texlite visual display which is updated with a few seconds
following an entry. There are two trading sessions on the ISE every
regular working day of the week, first between 10:00-12:00 and the
second between 14:00-16:00.l There is also a short session for odd
lot trading, primary market transactions, official auctions and
stock rights between 09:00-9:15. The clearing, settlement custody
services are performed by the ISE Settlement and Custody Co. Inc.,
founded in January 1992. The company also has offering services such
as exercising of preemptive rights and dividend collection in the
name of ISE members. The settlement of each transaction is performed
by the company by 3:00 p.m. on two business days following the
execution of the transaction.
As for the
future prospects of the ISE, it can be said that 1995 will be a
yielding year for a number of reasons. First of all, according to
the program budget, 1995 will be year of moderate growth. Also, the
stock exchange is expected to gain a competitive edge over
alternative investment tools as both the exchange rates and the
interest rates will be closely controlled by the state.
Privatization activities will stimulate the market. Finally ISE will
be more closely integrated with international markets in time.
Rreturn to Turkish Capital
Markets
The Debt Market
Corporate
bonds, commercial papers, asset backed securities, government bonds,
treasury bills, revenue sharing certificates and foreign exchange
indexed bonds constitute the whole spectrum of debt securities. The
public sector clearly dominates the debt market, and this trend has
become even more pronounced following the financial crisis in the
earlier part of this year, mainly due to the high public sector
borrowing requirement levels. Moreover, as result of the instability
in the market, 95% of the supply in 1994 has been in three and six
month T-bills. Yield curve extends up to one year in T-bills and up
to three years in government bonds, but trading liquidity exists for
instruments with tenors up to six months. Secondary market
transactions mostly take place in Istanbul Stock Exchange (ISE)
Bills and Bonds Market, where prices are quoted on screen by major
information services. Central Bank has recently started to conduct
their open market operations through the ISE Bills and Bonds Market
to contribute to liquidity. Trading hours are between 10:?00 and
17:00. Value dates are from same day to one week. Majority of
transactions are executed through the Istanbul Stock Exchange, where
same day transactions executed between 10:00-14:00 are cleared by
15:00.
The best
proxy for the debt market performance is the Treasury's three-month
T-Bill auction rates. In the first months of 1994, the Treasury's
attempts at forcefully reducing the rates by canceling auctions
backfired leading to a confidence crises. The Treasury had to issue
the so-called "super 3 Month T-Bills" carrying a nominal interest
rate of 200%. Since June 1994, along with the stabilization of
economy, rates have entered a downward trend. Pace of fall has been
around 30 percentage points per month, taking the rates from 200%
down to 79% at the last auction. As for the monthly trading volume,
there has been a consistent increase especially after May and the
total volume traded in August shows a 25.6% increase over the same
period in 1993.
For the near
future, the debt market presents high prospects. Increasing trading
volume, and the liquidity produced by the continuous auctions of the
Treasury are factors which will enhance the efficiency and the
productivity of the Turkish debt market.
Rreturn to Turkish Capital Markets
The Istanbul Stock Exchange (ISE)
An organized
securities market has existed in Turkey since the mid 1 800s,
although the market had became dormant by the late 1 970s. In 1981,
a new Capital Market Law established the Capital Markets Board (CMB)
as the main regulatory body for the Turkish securities market. in 1
985, the Istanbul Stock Exchange (ISE) was reestablished and
transactions recommenced in early 1 986.
Performance
Although the stock exchange is relatively young, its performance to
date has been impressive:
- Over 1
,266 companies listed, of which approximately 177 trade on a
regular basis.
- Total
trading volume reached a value of US $20 billion for the year
1994, with US $160 million traded on a daily basis.
- Over the
past nine years, the ISE has provided excellent returns- a
compound annual rate of approximately 1 9%.
-
Performance levels are expected to increase with the introduction
of the Istanbul Stock Exchange Electronic Trading System (ELIT)
since the result will not only be an increase in daily traded
volume, but further the elimination of the time lag between
different stock exchanges. Coupled with the extension of the
clearing settlement period (to transaction plus two days), it will
increase operational potential
While Turkey
has recently undergone a period of volatility in both the foreign
currency and stock markets, this temporary situation is being
subdued with the introduction of corrective economic measures by the
government in April 1994.
Outlook
A number of
factors are expected to promote the continued strength of the
Istanbul Stock Exchange by increasing liquidity and institutional
participation, ensuring Turkey to provide investors with an
attractive opportunity for diversification from Latin American and
Southeast Asian markets:
Modernization
Program. The ISE is being modernized with a relocation to a new and
larger building and the installation of an automated electronic
trading system.
Incentives
and international recognition. Tax incentives will promote
investment by Turkish institutions, while Turkey's increased
coefficient in the IFC's Emerging Markets index, should generate
investment by foreign investors.
Spill-over
effects from European economies. The linkages between Turkey and the
major European economies suggest that the spill-over effects will be
strong as Europe emerges from recession.
Privatization
program and new forms of equity investments. The government's
privatization of state-owned enterprises and the introduction of new
equity investments should continue to attract investors. In this
connection the CMB recently approved the listing of equity-based
mutual funds.
Click here to return to the ISE
Brokerage Houses
Istanbul
Stock Exchange (IMKB) (212) 252 48 00
ABC Finans Benkul Degerier (212) 288 20 30
Aktif Menkul Degerier (212) 275 11 56
Ari Menkul Degerier (212) 249 91 05
Arigil Menkul Degerier (212) 251 05 54
Basak Menkul Degerier (212) 230 05 54
Baskent Menkul Degerier (212) 270 71 00
Bayindir Menkul Degerier (312) 467 41 00
Birikim Menkul Degerier (212) 274 49 32
Bumerang Yatirim Menkul Degerier (212) 280 81 00
Dema Menkul Degerier (212) 262 71 90
Derborsa Borsa Bankerligi (212) 522 83 13
Dunya Menkul Degerier (212) 512 84 65
Eczacibasi Menkul Degerier (212) 234 35 01
Garanti Yatirim (212) 251 36 22
Genborsa Menkul Degerier (212) 248 51 05
Global Menkul Degerier (212) 211 49 00
Guven Menkul Degerier (212) 288 16 08
Karon Menkul Degerier (212) 280 33 77
Meksa Menkul Degerier (212) 274 11 06
Nurol Menkul Degerier (212) 270 18 44
Oki Yatirim ve Menkul Degerier (212) 293 64 40
Oyak Menkul Degerier (212) 230 77 75
Toros Menkul Degerier (212) 231 38 64
Yatirim Finansman (212) 275 44 80
Click here to return to the ISE
Factoring
Having been
introduced to the Turkish economy six years ago, factoring has
gained itself a well-deserved place, far more than was ever
prospected for this newcomer when it first started.
With its
facilities for post-finance, export guarantee and market research,
factoring, now, is a quite common technique, practiced by not only a
large group of exporters from various sectors, but also by many
domestic traders of the local market.
Based on the
principal of invoice assignment, what factoring mainly provides is
the collection of sales within or before its maturity.
Customer
evaluation, cash management and consulting are other available
services which come as by-products.
Factoring,
also, has inevitably, taken its share from opposing effects of the
monetary and financial crisis recently experienced by Turkish
economy. The numerous difficulties that the sector has been exposed
to were basically stemming from funding disability, and
consecutively credit assessment. This dissenting situation showed
its effect intensively in domestic factoring, but thanks to its
export-oriented structure, factoring managed to survive through the
crisis as a whole, with its export branch volume funded and
guaranteed with sources of foreign nature.
A quite
recognized and established actor of the economic arena, factoring
has set its hopes high for the coming year. The ongoing process for
a better legal organization of factoring, supported with an
institutional structure, has been seriously accelerated. These
activities are continued in care of the Factoring Association.
Factoring
aims to fulfill its vital role in increasing the export volume of
Turkey, in accordance with government policies. The stabilization of
money markets and positive progress of the political situation are
the essentially factors that factoring counts on its search for
better serving the Turkish Economy.
Click here for a listing of factoring companies
Ismail EMEN
Chairman of the Board
Factoring Association
Factoring Companies
Atkif Finans
Factoring Facto Kapital Factoring
I. Levent Caddesi No. 4 Halaskargazi Caddesi 336 K.
4
Levent, Istanbul Sisli, Istanbul
Tel: (212) 280 21 72 Tel: (212) 231 40 20
Fax: (212) 268 13 91 (4 lines)
Fax: (212) 231 40 18
Demir Factoring
Buyukdere Caddesi Fiba Finans Factoring
122 B Block Kat 3 Voyvoda Caddesi Karakoy Palas
11 Kat 4
Esentepe, Istanbul
Tel: (212) 288 68 00 Karakoy, Istanbul
Fax: (212) 288 68 35 Tel: (212) 293 18 50
Fax: (212) 293 18 58
Devir Factoring
Buyukdere Cad. 80 Akabe Tic. Mrk. Heller Factoring
Kat 7 Gayrettepe, Istanbul Buyukdere Caddesi Lalazar Han
1101
Tel: (212) 274 80 90 Kat 3
Fax: (212) 274 16 80 Mecidiyekoy Istanbul
Tel: (212) 274 34 50
Es Factoring (4 lines)
Istiklal Caddesi Odakule Kat 16 Fax: (212) 274 10 50
Tepebasi, Istanbul
Tel: (212) 293 11 00 Kapital Factoring
Fax: (212) 293 07 43 Meclisi Mebusan Caddesi
Atlantik Han
139 Kat 2 Findikli,
Istanbul
Euro Factoring Tel: (212) 293 01 47 - 48
Ionou Caddesi Dunya Saglik Sokak 31 Fax: (212) 249 84 69
Taksim, Istanbul
Tel: (212) 245 23 13-14 Okumus Finans Factoring
Fax: (212) 249 95 33 Gumussuyu Inonu Caddesi
90/6
Dersan Han Taksim,
Istanbul
Tel: (212) 249 27 57
Fctor Finans Factoring Fax: (212) 252 64 04
Buyukdere Caddesi 165
Esentepe, Istanbul Plato Finans Factoring
Tel: (212) 274 71 58 - Murbasan Sok, Koza Is Mrk. B
Blok D.
274 66 66 12
Fax: (212) 274 70 68 Besiktas, Istanbul
Tel: (212) 288 62 28
Fax: (212) 288 62 32
Poyraz Factoring
19 Mayis Caddesi No. 1
Golden Plaza is Mrk K. 9
Golden Plaza is Mrk K. 9
Sisli, Istanbul
Tel: (212) 225 08 96
Fax: (212) 225 08 99
Leasing
When an
investor decides to make an investment that entails leasing or
simply wants to extend his current investment, the investment goods
he has designated are purchased by the leasing company and leased to
his company at a specific cost and for a specific period.
Formerly, an
establishment wanting to finance an investment would generally have
used equity funds or obtained credit from a financial institution.
The leasing route introduces a brand new and highly advantageous
financing option that is used widely throughout the world. As well
as providing an alternative to the use of medium term credit and
equity funds, leasing also presents a method of obtaining cash.
Leasing began
life in Turkey in 1985 with the passing of Act No. l3226. According
to figures for 1993, leasing provided the financing for 5.9% of
investments made in that year. Having begun to gain recognition on a
nationwide basis, leasing is now in demand from every comer of
Turkey.
Volkan OLCAY
Vakif Leasing
Click here for the merits of leasing
Click here for a listing of leasing companies
The Merits of Leasing
1. Provides
100% financing.
2. Does not consume equity funds.
3. Does not affect credit opportunities.
4. Reduces costs thanks to VAT advantages.
5. Is an affordable and stable means of financing.
6. Allows for sound budgeting.
7. Leasing payments can be shown as expenses.
8. Is a long term financing alternative.
9. Procedures are quickly concluded.
10. Large-scale and wide-ranging investments can be undertaken with
leasing.
11. Allows lessee to benefit from investment incentives.
12. The lessee becomes the owner of the leased goods at the end of
the contract period.
Leasing Companies
Atlas Leasing
Buyukdere Caddesi 165
Esentepe, Istanbul
Tel: (212) 275 38 68
Fax: (212) 275 17 22<
BNP-Ak
Dresdner Leasing
Inonu Caddesi 2/12 Vakif Is Hani Kat 3
Taksim, Istanbul
Tel: (212) 251 90 69
Fax: (212) 251 90 74
Demir Leasing
Buyukdere Caddesi 122/B>
Esentepe, Istanbul
Tel: (212) 288 05 65
Fax: (212) 275 90 45
Ege Leasing
Buyukdere Caddesi 106
Esentepe, Istanbul
Tel: (212) 274 42 22
Fax: (212) 275 69 99
Es Leasing
Istiklal Caddesi Kat 16
Odakule Is Merkezi
Tepebasi, Istanbul
Tel: (212) 293 11 00
Fax: (212) 293 07 43
Finans
Leasing
Cumhuriyet Caddesi
18 Kat 4
Elmadag, Istanbul
Tel: (212) 234 02 00
Fax: 212) 234 01 06
Garanti
Leasing
Ortaklar Caddesi Bahceler Sokak 13
Mecidiyekoy, Istanbul
Tel: (212) 288 55 08
(6 lines)
Fax: (212) 274 16 54
Halk Leasing
19 Mayis Caddesi 1 Golden Plaza
Sisli, Istanbul
Tel: (212) 231 35 39
Fax: (212) 230 46 69
Iktisat
Leasing
Buyukdere Caddesi 165
Zincirlikuyu, Istanbul
Tel: (212) 274 70 55
Fax: (212) 275 75 44
Isgen Leasing
Buyukdere Caddesi 100/102
Maya Akar Center Kat 11
Esentepe, Istanbul
Tel: (212) 288 90 90
Fax: (212) 288 95 00
Rant Leasing
Inonu Caddesi 72/A
Teknik Han
80090 Gumussuyu, Istanbul
Tel: (212) 293 09 15
Fax: (212) 293 09 27
Vakif Leasing
Inonu Caddesi 2
Vakif Is Hani
80090 Taksim, Istanbul
Tel: (212) 252 96 31
(5 lines)
Fax: (212) 252 96 30
Yapi Kredi
Leasing
Sehit Muhtar Caddesi 5
Taksim, Istanbul
Tel: (212) 250 14 54
Fax: (212) 251 12 60
Zirat Leasing
Kasap Sokak Ozden Konak Ishani
2 Kat 8 Esentepe, Istanbul
Tel: (212) 288 30 65
Fax: (212) 288 30 70 |
