Turkiye: The stock market has been stabilized with measures taken

While the stock market entered a fluctuating period with the increased risk perception after the earthquakes, it is observed that the efforts to balance with the measures taken came to the fore.

In order to reduce the uncertainties in the markets, it is seen that the stock market was suspended after the great earthquakes in history. Due to the earthquakes in Kahramanmaras, the volatility in the stock market reached its peak.

Borsa Istanbul started trading on Monday, following the earthquakes on February 6, with measures such as the warehouse requirement and the ban on short selling. The BIST 100 index, which lost 1.35% in the first day of the earthquake and decreased by 8.62% on the second day due to increasing sales pressure, was suspended for 5 trading days due to the unhealthy price movements that occurred after the opening on Wednesday.

Bureaucratic processes for share buybacks have been shortened

The measures taken by the Capital Markets Board (SPK), Borsa Istanbul, Insurance and Private Pensions Regulation and Supervision Agency and the Banking Regulation and Supervision Agency (BDDK) were announced before Borsa Istanbul started operations on February 15.

With the measures taken, bureaucratic processes in share buybacks were shortened, and the minimum shareholding obligations of state contribution funds in the Private Pension System (BES) were increased.

BIST 100 index, which gained 9.88% on Wednesday, February 15, when Borsa Istanbul was reopened with the measures taken after the earthquake, started the day with an increase of more than 7%, but gave back a significant part of its gains and closed the day with an increase of 1.17.

The BIST 100 index, which was observed to be prominent in balancing efforts last week, increased by 0.63% on a weekly basis to 5,058.75 points, remaining above the pre-earthquake level.

Special measures were taken for companies in the region

While companies located in the earthquake zone were affected relatively more, some companies were suspended from trading in the stock market until the damage assessment studies were completed.

In this context, Sasa Poliyester, Bossa Trade and Industry Enterprises, Bilici Investment, Sanko Marketing and Rubenis Textile announced that there was no significant damage in their factories and that production continued, while the transaction queues of the companies were opened on the same day.

While Iskenderun Iron and Steel and Hatay Textile opened for processing on February 20, Arsan Textile is still closed. In the statement sent by Arsan Textile to the Public Disclosure Platform (KAP), it was stated that the damage file was opened and the process continues.

The course of the BIST 100 index after earthquakes

Due to the earthquake that occurred on 17 August 1999 in Kocaeli’s Golcuk district, Borsa Istanbul was closed for 7 working hours. Although the BIST 100 index decreased by 10.4% compared to the previous closing level after opening to trading on August 26, it compensated some of its losses the next day and increased by 1.4%.

The BIST 100 index had increased by 6.4% in the one-month period after the 1999 earthquake. The biggest contribution to the index to make up for its losses in a month’s time came from the main sectors of stone, soil and metal.

BIST 100 index, after the earthquake that occurred in Ercis district of Van on October 23, 2011, gave a limited response and decreased by 0.9% on a daily basis on October 24, 2011. The index, which gained 0.4% on a weekly basis, decreased by more than 10% in the month until November 23, due to new earthquakes in the region.

While the daily loss in the BIST 100 index, which was at its historical peaks before the earthquake that occurred in Elazig on January 24, 2020, was 0.3%, the index lost 2.5% on a weekly basis and more than 6% on a monthly basis.

Finally, in the earthquake that occurred in Izmir on October 30, 2020, the BIST 100 index lost 1.3% on a daily basis. While the index recorded an increase of 7.2% on a weekly basis, making up for its losses, the increase was 15.4% on a monthly basis.

Source: Trthaber / Prepared by Irem Yildiz

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