Investors pouring money into IPOs in Borsa Istanbul

Turkish investors have been pouring money into the initial public offerings (IPO) in Borsa Istanbul this year, while the number of investors in the country’s stock exchange has increased by 2.5 million in the first eight months.

Since the start of the year, companies have garnered 43 billion Turkish Liras ($1.6 billion) from IPOs,with Borsa Istanbul’s IPO index soaring 101 percent 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.

In the whole of 2022, 40 IPOs were launched.

Yields on stocks in the companies, which went public over the past year, leaped 316 percent, while the benchmark BIST-100 index rose 114 percent over the same period.

For instance, the shares in Oncosem Onkoloji, which went public in early January, has gained more than 1,200 percent in 248 days, with the company’s share price rising from 17.5 liras to 237 liras.

Meanwhile, more and more investors are turning to Borsa Istanbul. The number of investors in the country’s stock exchange rose by 2.46 million to reach 6.3 million as of Aug. 31, according to data from the Central Registry Agency (MKK).

The benchmark index has risen more than 50 percent since the start of the year, driven by bank shares.

Now that the government has started rolling back the FX-protected deposit account (KKM) scheme, the question of where the investors will put their money has come to the fore.

Foreign currencies, stocks, deposit accounts and real estate appear to be the best options for local investors.

Meanwhile, foreign investors are keeping a close eye on Turkish assets after the government signaled it will follow more orthodox policies.

Foreign investors are wading into Turkish stocks and bonds as Ankara’s economic policy overhaul piques the interest of fund managers, said the Financial Times in a story it ran last week.

Recent months have seen a noticeable and positive change in international investor interest in Turkish capital markets, HSBC Türkiye CEO Selim Kervancı told the daily.

“The interest is broad-based with demand coming from the U.K., Europe, the U.S. and the Middle East refocusing on Türkiye as an investment destination,” he said.

On Sept. 8, Fitch revised Türkiye’s outlook from negative to stable and affirmed its “B“ rating.

The revision reflects the return to a more conventional and consistent policy mix that reduces near-term macro-financial stability risks and eases balance of payments pressures, Fitch said.


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