According to Borsa Istanbul's Trends Report, as of the first quarter of 2016, Borsa Istanbul's market value increased by 13 percent in TL terms and 17 percent in dollar terms. The BIST Trends Report's evaluation results for the first quarter of 2016 as prepared by the Turkish Investor Relations' Society (TUYİD) and the Central Registry Agency (MKK) were announced on Monday.
The most significant factor in terms of the global markets was the Turkish lira marking an upward trend especially against the U.S. dollar as a result of news regarding how fast the Federal Reserve (Fed) will increase interest rates and developments in late March.
The highest percentage increase belonged to the holdings index while Borsa Istanbul's locomotive bank index increased by 13 percent in dollar terms. The highest increase compared to the previous year was for the technology index with 43 percent.
The report indicates that Borsa Istanbul's trade volume increased in TL terms compared to the fourth quarter of 2015, and showed a slight decrease compared to the first quarter of 2015. While Borsa Istanbul's trade volume continued an increase during the first quarter of 2016, it increased 6 percent in TL terms and 5 percent in dollar terms. The biggest contribution to this increase was made by services and financial and trade indexes, respectively; however, bank and holding indexes slightly decreased.
During the first quarter of 2016, $1.5 billion worth of foreign purchase were observed in Borsa Istanbul. The biggest contribution to this was in the financial index with $1.1 billion. In addition, a net inflow of $874 million was observed in the banking index, included in the financial index. The only foreign purchase during this period was observed in the technology index with $8 million.
The fact that domestic investors' risk appetite was higher than foreign investors drew attention in the BIST Trends Report. During the first half of the first quarter of 2016, the Investors' Risk Appetite Index (RISE) generally maintained below the critical level of 50 percent. During the second half of the quarter, RISE values started increasing. The score for the last week of the first quarter showed the highest value of this year with 68.6 percent while the lowest value was 32.8 percent on Jan. 15.
RISE values started the year at 44 percent. After up and downturns, it closed the first quarter at 68.9 percent. The report indicated that due to Fed-based uncertainties, foreign investors showed a pessimistic attitude, and during the remaining weeks of the first quarter, because of the Fed's withdrawn and cautious attitude, some of the world stock markets, including Borsa Istanbul and America as well as Europe, had once again became attractive for investors. According to 2016's first quarter results, the portfolio values of both domestic and foreign investors increased in all the indexes compared to the previous year. The three countries with the highest portfolio values were the U.S., England and Luxembourg. While 1,313 domestic investors in the U.S. constitute 31 percent of total foreign investments, the U.S. and England-based investors hold 49 percent of the total investors' portfolio.
While the foreign investors' share in Borsa Istanbul's trade volume was 22 percent in 2015, it reached up 25 percent during the first half of 2016. The highest trade volume of the foreigners was observed in BIST Trade index with 44 percent, and their lowest volume occurred in the technology index with 14 percent. While the foreign investors had a 25 percent share in Borsa Istanbul's trade volume during the January to March period, their share in the market value reached 64 percent.
The report indicates that the first quarter of 2016 was calm in terms of public offerings, just like the past two years. As a result of the negative outcomes of the macroeconomic developments within and outside the country, coupled with uncertainty and low borrowing costs, a serious decrease was observed in the revenues provided by the companies offered to the public in the Borsa Istanbul Share and Emerging Companies Market over the past two years. During the first quarter, a company's public offering brought TL 37 million ($13 million) in revenue, and demand mostly came from domestic investors.