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March 2008
Turkish capital market institutions - competing and cooperating in a rapidly developing financial market
Nevzat ÖZTANGUT, TSPAKB
March 2008Brokerage Firms’ Ownership Structure
Source: TSPAKB
95 98 9788 86
69
59 9
96
21 26
44 4
44
4 4
19 8 7
85
74
01
2001 2002 2003 2004 2005 2006 2007
SDIF
Public
Foreign
Domestic
123119 117
112
101 100 99
March 2008Market Capitalisation (Billion $)
Turkey's equity market capitalisation has grown nine-fold between 2002 and 2007.
When compared to the world’s leading exchanges, the size of the Turkish market is still limited.
6133
112
6947 34
6998
163 164
290
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
ISE Market Capitalisation
Source: ISE
290
2,6543,6943,8524,0144,2234,331
15,651
2,1872,105
0 500 1,000 1,500 2,000
NYSETokyo
Euronext NasdaqLondon
ShanghaiH. Kong
TSXDeutscheBombay
SpainNSE IndiaSao PauloAustralia
SwissOMX
S. KoreaItalyJ SE
ShenzhenTaiwan
SingaporMexico
Oslo BørsMalaysiaIstanbulAthensAmex
WienerTel Aviv
International Comparison (2007)
Source: WFE
March 2008Equity Trading Volume (Billion $)
ISE’s trading volume increased four times between 2002 and 2007.
ISE’s trading volume of $300 bn. is still moderate as compared to other stock exchanges.
58 70 84
182
80 71100
148
202227
301
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
ISE Trading Volume
Source: ISE
301
5,6486,476
10,32415,320
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
NasdaqLondonTokyo
Euronext DeutscheShanghai
SpainItaly
H. KongShenzhenS. Korea
SwissOMX Nordic
TSXAustralia
TaiwanNSE India
AmexSao PauloOslo Børs
J SESingapore
BombayIstanbul
OsakaMalaysiaAthens
IrishWiener
International Comparison (2007)
Source: WFE
March 2008Listed Companies
The number of listed companies on the ISE has been increasing since 2003.
However, the overall number of around 320 is still very limited as compared to other exchanges.
258277 285
315 310288 285 297 306
322 319 319
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-01Source: ISE
No. of Listed Companies on ISE
3,0693,307
4,8673,8393,537
319
0 500 1,000 1,500 2,000 2,500 3,000
BombayTSX
SpainLondonNasdaq
TokyoNYSE
AustraliaS. Korea
NSE IndiaH. Kong
Euronext Malaysia
DeutscheShanghai
OMXSingapore
TaiwanShenzhen
Tel AvivAmex
ThailandOsakaEgypt
J SESao Paulo
J akartaWarsawMexico
SwissTehran
Istanbul
Source: WFE
International Comparison (2007)
March 2008Breakdown of Savings (Billion $)
Source: BRSA
237295 321
68
7686
99
99
31
25
109
29
2005 2006 2007/ 09
Mutual Funds
Fixed Income
Equities
Deposits
422
495
558
March 2008Savings’ Preferences
Equities represent 64% of foreign investors’ savings.
Equities’ share in domestic investors’ savings remains at 7%.
67%72% 72%
18%16% 14%
9% 6% 7%
7% 7% 7%
2005 2006 2007/ 09
Equities
Mutual Funds
Fixed Income
Deposits
Domestic Investors' Savings
Source: BRSA
61%55%
64%
33%39%
31%
6% 7% 5%
2005 2006 2007/ 09
Deposits
Fixed Income
Equities
Foreign Investors' Savings
Source: BRSA
March 2008
0.39
0.56 0.55
1.371.27 1.20
1.111.01 1.02 1.06 1.081.07
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-01
Number of Equity Investors (Million)
Source: CRA
March 2008Equity Ownership vs. Trading Volume
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003 2004 2005 2006 2007
For. Institutional
For. Corporation
For. Individual
Dom. Institutional
Dom. Corporation
Dom. Individual
Source: TSPAKB
Equity Trading Volume
Foreign investors hold around 70% of total equities traded in the market.
Domestic individual investors provide market liquidity.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003 2004 2005 2006 2007
For. Institutional
For. Corporate
For. Individual
Dom. Institutional
Dom.Corporate
Dom. Individual
Equity Ownership
Source: CRA
March 2008Derivatives Trading Volume of Intermediaries (Billion $)
2021
162
413
2005 2006 2007
Brokerage Firms
Banks
5
25
182
Source:TURKDEX
March 2008Turkish Capital Market Agenda
Short-term: New Instruments
Warrants Mortgage backed securities Single-stock futuresOptionsCorporate bonds
Medium-term: New Regulations
Ability for financial innovationAdoption of the EU acquis