Borsa Istanbul stock and futures markets reopened today after a week-long suspension in the wake of two devastating earthquakes in Kahramanmaras.[0] The index opened at 4769.15 points, with an increase of 263.81 points, following a series of measures to avoid a steep decline in stock prices.[1]
Veteran emerging-markets investor Mark Mobius sounded a note of caution, saying Turkey’s efforts to prop up stocks as they reopen could have the opposite impact.[2] “We can understand the government’s desire to limit the impact of the disaster on the market as a whole,” he said.[3] Yet, these interventions often have the opposite effect of what is desired.[3] He maintains a long-term optimistic view of the nation’s stocks.[3]
Last week, the Borsa Istanbul 100 Index, which had already been the worst-performing equity market in the world this year, experienced a market value drop of tens of billions of dollars over the two days it was open.[4] Turkish companies are now rushing to repurchase their own shares, after regulators ditched a 15% withholding tax on buybacks in a bid to support the stock market.[5]
The rebound came after authorities showed their determination to reverse the rout, with the Turkish government channeling billions of liras from pension funds and state lenders into the stock market, and encouraging buybacks.[2] On Monday, Minister of Treasury and Finance Nureddin Nebati organized a gathering with the central bank, the capital markets board, the banking regulator, and the leaders of government-controlled commercial banks. The meeting focused on the review of various measures.[4] The Borsa Istanbul 100 Index experienced a 7.5% increase before eventually closing 1.2% up on Thursday in Istanbul.[2] The index increased its two-day gains to 11%, the largest such increase since 2008.[6]
Overall, Borsa Istanbul has demonstrated its resilience in the face of a natural disaster, with the Turkish government taking the necessary measures to help the stock market recover.
0. “Borsa Istanbul to reopen after one week – Latest News” Hurriyet Daily News, 14 Feb. 2023, https://www.hurriyetdailynews.com/borsa-istanbul-to-reopen-after-one-week-180886
1. “Borsa Istanbul(BIST) Reopened! » Expat Guide Turkey” Expat Guide Turkey, 15 Feb. 2023, https://expatguideturkey.com/borsa-istanbulbist-reopened/
2. “Turkish Stocks Recoup Post-Quake Losses Thanks to Measures” BNN Bloomberg, 16 Feb. 2023, https://www.bnnbloomberg.ca/turkish-stocks-recoup-post-quake-losses-thanks-to-measures-1.1884661
3. “Mobius Says Turkey’s Effort to Boost Stocks Can Go Opposite Way” Bloomberg, 15 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-15/mobius-says-turkey-s-effort-to-boost-stocks-can-go-opposite-way
4. “Turkey Plans to Resume Stock Trading on Wednesday” Yahoo! Voices, 14 Feb. 2023, https://www.yahoo.com/now/turkey-plans-resume-stock-trading-072430160.html
5. “Turkish Companies Are Rushing to Repurchase Their Own Shares After Regulators Ditched a … – Latest Tweet” LatestLY, 15 Feb. 2023, https://www.latestly.com/socially/business/turkish-companies-are-rushing-to-repurchase-their-own-shares-after-regulators-ditched-a-latest-tweet-by-bloomberg-4846286.html
6. “Turkish Stocks Recoup Post-Quake Losses Thanks to Measures” Yahoo News, 16 Feb. 2023, https://news.yahoo.com/turkish-stocks-recoup-post-quake-074818095.html