Today, Borsa Istanbul stock and futures markets reopened after being suspended since Wednesday last week due to the earthquakes in Kahramanmaras.[0] The index opened at 4769.15 points with an increase of 263.81 points, but veteran emerging-markets investor Mark Mobius warned that Turkey’s efforts to prop up stocks could have the “opposite” impact.
To counter the economic and market fallout from the earthquakes, the Turkish government has implemented an array of measures. The Treasury and Finance Minister, Nureddin Nebati, met with the heads of the central bank, regulators and state lenders on Monday to discuss how to mitigate the damage.[1] Among the measures with the most expected impact are the government’s channeling of billions of liras from pension funds and state lenders into the stock market, and encouraging buybacks.[2] In addition, listed companies can now buy back their own shares without paying a 15% withholding tax.[3]
In response to these measures, the Turkish lira USDTRY, +0.04% slid to a fresh record low just shy of 19 to the dollar.[4] Meanwhile, Mobius expressed caution, saying that such interventions often have an impact opposite from what is intended, although he still has a longterm positive outlook on the country’s stocks.
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. “Turkey Injects Billions of Liras to Prop Up Stocks Before Open” Yahoo! Voices, 14 Feb. 2023, https://www.yahoo.com/now/turkey-plans-tax-waiver-share-204747726.html
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. “Borsa Istanbul(BIST) Reopened! » Expat Guide Turkey” Expat Guide Turkey, 15 Feb. 2023, https://expatguideturkey.com/borsa-istanbulbist-reopened/
4. “Turkey’s Stock Exchange Gains 10%, Lira Hit New Record Low | Sada Elbalad” See, 15 Feb. 2023, https://see.news/borsa-istanbul-gains-10-lira-hit-new-record-low