Turkish stock market is enjoying a record spree this year, with an annual increase in the number of investors with pending share balance rising by over 173.21% as of Sept. 11, according to the Central Registry Agency’s (MKK) data.
The annual increase in the number of investors with a share balance who participated in the stock exchange last year was announced as 4.5 million, according to MKK data.
According to the data published by MKK, some 882,800 new investors joined the stock exchange in the last 11 days alone and 1.98 million in the last month, an increase of 38.33% on a monthly basis.
Thus, the total number of investors with a balance in the share markets broke a record by reaching 7.14 million.
It is thought that the initial public offerings (IPOs), especially in recent weeks, are one of the main reasons for the increase in the number of investors.
Since the start of the year, companies have garnered TL 43 billion ($1.6 billion) from IPOs, with Borsa Istanbul’s IPO index soaring 101% in 2023, which meant investors doubled their earnings.
The IPO index is composed of stocks of the companies offered to the public and started to be traded on Borsa Istanbul markets.
This year, 33 companies have offered their shares to the public, and most of those IPOs were vastly oversubscribed. Among the companies that opened to the public recently, the retailer Ebebek garnered record interest, with 3.9 million individuals joining the opening.
In 2022, there were 40 IPOs worth about TL 19.3 billion, compared to a record of 52 listings in 2021, according to the Borsa Istanbul Stock Exchange (BIST) data.
Meanwhile, the benchmark stock index on Monday hit an all-time peak of 8,403.81 points before closing at 8,335.07 points, up by 9.77 points when compared to the previous closing.
Borsa Istanbul’s BIST trading volume reached 67.3 billion Turkish liras ($2.49 billion) on Monday.
The increase in investors’ appetite comes amid high inflation that ticked further upward in the last reading, nearly to 60%, as the government has been orchestrating a U-turn away from policies based on interest rate cuts that had been accompanied by a steep fall in the Turkish lira and soaring prices.
The new forecasts show annual inflation rising to 65% by year-end before dipping to 33% next year. It is expected to fall to 15.2% in 2025 before dropping further to 8.5% by the end of 2026.
After winning another five-year term in May, President Recep Tayyip Erdoğan overhauled his economic administration, spearheaded by naming respected veteran Mehmet Şimşek as treasury and finance minister.
Şimşek has said increasing the predictability of economic policies was one of the main goals of attracting foreign investment into the country.
In his strongest pledge of support for his new economic team’s policy overhaul after the May elections, Erdoğan last week said inflation would fall to single digits "with the support of tight monetary policy."
Credit ratings
Meanwhile, the international credit agencies expressed optimism over the government’s newly unveiled medium-term program that aims to tackle inflation while ensuring growth, taking into consideration the leaning toward more orthodox policies that came into place in recent months.
"The change of course is clearly credit positive," Moody’s analyst Dietmar Hornung told Reuters.
"The moves we have seen since the election are encouraging, but the challenges ahead are complex," Hornung said, explaining that cooling inflation expected to rise to 65% this year, and unpicking other "accumulated imbalances" was challenging.
On Sept. 8, Fitch Ratings revised Türkiye’s outlook from negative to stable and affirmed its "B "rating.
Fitch on Tuesday cited a return to more conventional economic policymaking since the May election as the primary driver behind its decision to upgrade Türkiye’s credit rating outlook last week.
Despite past reversals, the government’s efforts to address macroeconomic imbalances and provide stability have garnered investor confidence, Erich Arispe Morales, a senior director in Fitch Ratings’ sovereigns group, told Anadolu Agency (AA).