Borsa Istanbul's BIST 30 Index futures and options denominated in Turkish Lira will start trading in London Stock Exchange on Monday. The deal will help global investors to diversify their portfolios in a cost efficient way
The London Stock Exchange Derivatives Market (LSEDM) will launch trading in BIST 30 Index futures and options denominated in Turkish Lira, the London Stock Exchange Group (LSEG) and Borsa Istanbul announced at a ceremony Friday. Following a partnership agreement signed between LSEG and Borsa Istanbul earlier this year, the London Stock Exchange's global client base will be able to trade futures and options on the BIST 30 Index.
Speaking during the launch ceremony, Çetin Ali Dönmez, the deputy general manager of Borsa Istanbul, said Turkey's global economy will be strengthened by reaching the global investor network of the London Stock Exchange, emphasizing that this agreement is a milestone in Borsa Istanbul's strategic vision. "This agreement will allow us to introduce our products to a larger audience as well as give a chance to our global investor base to access the region's most dynamic and developing economy in the cost efficient way and diversify their portfolios," he said. Dönmez also said that the trading of the BIST 30 Index futures and options on two different venues will increase liquidity at both exchanges. Muammer Çakır, Borsa Istanbul's derivatives group manager, said: "Listing BIST 30 Index derivatives [on the] LSEDM will give us well-deserved visibility on a global scale. Trading and clearing at the London Stock Exchange Group's venues will offer a global client base a unique opportunity to have operational and collateral efficiencies, which are invaluable in the post-crisis financial regulatory framework." Çakır also said the ability to access Turkish products through a single platform will also attract a new class of investors for Turkey, creating a virtuous cycle benefiting both markets.
On the other hand, Turkey's ambassador to London, Abdurrahman Bilgiç, said the partnership aims to create a lasting bond between the financial centers of the U.K. and Turkey and contribute to Turkey's development as a financial center. "The positive developments that have been observed in the Turkish economy for the last 10 years have highlighted Turkey, especially Istanbul," Bilgiç said. "Moreover, Turkey assumed the presidency of this year's G20. Today will be a milestone for our financial relationship and put great emphasis of Borsa Istanbul's motto 'Regional center, global actor.'"
Also speaking at the ceremony, Nicolas Bertrand, the head of equity and derivatives markets at the LSEG, said it is an important step for the London Stock Exchange Derivatives Market and Borsa Istanbul Derivatives Exchange to collaborate, as the BIST 30 Index derivative and option agreement has begun being traded.
Stressing that they proved their capability to innovate and they are offering their clients a chance to buy and sell globally, Bertrand said: "Making collaborations with stock exchanges such as Borsa Istanbul, which rolls up its sleeves to become a regional financial center, reflects the London Stock Exchange's 'open access' approach." Cecile Nagel, global head of equities at LCH.Clearnet, said: "This initiative shows our determination to [jointly] broaden our derivative products business with trading platforms." The liquidity of the more than 180,000 BIST 30 Index futures contracts are being traded on the Borsa Istanbul Derivatives Exchange daily. The liquidity of the derivatives contracts that will be open for trading on the London Stock Exchange will be covered by market makers. The central reverse guarantee of the London Stock Exchange Derivatives Market and clearing members are covered by LCH.Clearnet.