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TURKISH ECONOMY /

Economic Outlook

Foreign Trade

Foreign Investment

Free Trade Zones

Banking and Capital Market

Frontier Formalities

Statistics

 

In 1993, Turkey's securities market was one of the strongest performing markets. But, following a buoyant course of activity in 1993, 1994 was a year of slowdown in primary markets for securities in Turkey. In a generally unfavorable economic environment which also impacted the real side of the economy, borrowing through security issues in particular experienced a decline throughout the year. This major contraction was offset by a surge in the issue volume of equities in the corporate sector. Primary market activity in government papers continued their rising trend in the course of the year with a heavy concentration in treasury bills.

Securities Issues Registered With The Board
Between 1986-1995

Years Shares Corp.Bonds Commercial
papers
Asset
Backed
Securities
MFPC
(TL Million)
1986
1987
101,979
187,202
110,982
317,531
-
55,800
-
-
-
45,000
1988
1989
364,478
971,543
210,860
604,514
271,000
465,350
-
-
53,000
161,500
1990
1991
4,106,637
4,443,524
762,344
813,335
215,100
667,369
-
-
855,000
65,000
1992
1993
5,322,828
9,573,375
796,900
715,234
1,006,631
1,205,450
14,480,585
52,756,391
92,000
5,355,000
1994
1995
37,553,000
51,335,076
491,090
1,883,100
156,500
1,533,000
42,299,369
113,928,450
2,203,000
4,249,000

Source: Capital Market Board

Private sector securities issues registered with the CMB showed an 18% increase over the previous year in TL terms.
In this total, shares issues had the largest portion with 44%, and exhibited a 292% increase over the previous year.

In contrast to the increased activity in the equities market, primary market activity in private sector debt instruments declined dramatically in 1994 due to high interest rates and uncertainties prevailing in the financial markets as a whole.

Despite the negative outlook in the first three quarters of 1994, the market recovered quickly in the last quarter. Due to an overall more positive outlook, the inner dynamics of the country and new measures and rules implemented in order to restore confidence led to a very quick recovery in the first half of 1995.

Total volume of securities issues registered with the Board recorded a remarkable increase in 1995. A significant portion of this total volume belongs to the asset-backed securities issued by banks which is a 65%. Ranking second with 29% out of the total, shares issues reached the level of TL 51, 335,076 million.

Corporate bonds issues showed an increase of 283% over 1994's figures. Again, commercial papers issues registered with the CMB, reached to the level of TL 1,533,000 million, showing 879% increase over the previous year.

As of October, 1995, total volume of securities outstanding was recorded at TL 1,411,039 billion, of which 80% belongs to the public sector securities. Although the weight of the public sector securities declined from 81.9% in 1994, to 80% in 1995, it still has the dominant share in the outstanding securities.

Outstanding Securities

Years Private Sector Securities Public Sector Securities Total
(TL Billion)
1986 937.6 3,103.7 4,041.3
1987 2,113.2 5,360.4 7,473.6
1988 3,851.3 8,407.1 12,258.4
1989 8,026.5 15,485.0 23,511.5
1990 16,139.9 25,369.7 41,509.6
1991 34,566.4 44,718.7 79,285.1
1992 60,728.0 121,596.4 182,324.4
1993 112,070.7 270,087.5 382,158.2
1994 130,898.4 595,903.8 726,802.2
1995/10 275,044.4 1,135,994.5 1,411,038.9

Source: Capital Market Board

Resulting from both tax incentives for mutuals funds with a minimum 25% of portfolio in equities ( type-A mutual funds ) and deregulation in 1992 allowing insurance companies and non-bank intermediaries to set up mutual funds and investment trusts, the composition of investors developed in favor of collective investment schemes.

As of November, 1995, the number of type-A mutual funds is 39 whose total portfolio value level is TL 4,907,929 million.

There are also 60 mutual funds of other types which make the total number of mutual funds 99. Total portfolio value of the other type mutual funds is TL 30,663,625 million by the end of November, 1995.

Portfolio composition of mutual funds exhibits a dominance of public borrowing instruments. As of end November, the percentage share of Treasury Bills in the total portfolio of type-A mutual funds is 54.7%. Nevertheless, it marks a decreased concentration in Treasury Bills in comparison to the end of 1994, with 64.4%. Naturally, equities have the second major portion in the portfolio composition of type-A mutual funds, with 44% as of November, 1995.

For the other type mutual funds, concentration in Treasury Bills stands at more significant levels with 86.3% in total, indicating a declining dominance of public borrowing instruments in comparison to 90.1% in end 1994

The number of type-A investment companies which operate in the Turkish capital market is 9 as of November 1995.

The portfolio composition of these investment companies exhibits the dominance of equities with 75.2%, unlike mutual funds. The total portfolio value of type-A investment companies is TL 1,519.1 million as of November, 1995.

 


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