FEAS Yearbook FEAS Yearbook 2009 | Page 76

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2009 ISTANBUL STOCK EXCHANGE ECONOMIC AND POLITICAL DEVELOPMENTS Economic and Political Environment The recent subprime mortgage crisis and financial crisis, increasing unemployement increased the threats of a recession in the world economy. The crisis in the world economy has an impact on Turkish economy. But Turkish economy has not been affected by the global crisis severely due to Turkey has improved its macroeconomic situation with a determined fiscal discipline, prudent monetary policy, political stability, social security reform, large privatizations and structural reforms. Turkey has implemented a range of economic, political and social reforms in an effort to meet EU requirements. The ongoing process of EU accession and the signing of a new stand-by agreement with the IMF covering the period of 2005-2008 have created two strong anchors for increasing Turkey’s growth potential and improving a better functioning market economy. Rehabilitating the business environment, diminishing unrecorded economy, strengthening financial system, promoting communication and information technologies are among the targets of the economy management for the upcoming years in order to lift Turkey onto a significantly higher growth trajectory. Economic Performance Following the GNP growth rate of 4.6% achieved in 2007, the Turkish economy grew by 3% in the first three quarters of 2008. The consumption expenditure of resident households grew by 3.3% in the same period of 2008. The investment expenditures of the public sector grew by 1.2% and the private sector investment expenditures grew by 0.8% in the same period of 2008. In the January-November period of 2008, exports and imports reached US$ 124.3 billion and US$ 190.5 billion, respectively, exports registering an increase of 27.4% and imports registering an increase of 23.8% compared to the same period of 2007. Accordingly, the rate of imports covered by exports stood at 65.2% as of November 2008. As of December 2008, the year-on-year consumer price index increased by 10.06% and the year-on-year producer price index increased by 8.11% compared to the same month of the previous year. The consolidated budget registered a deficit of YTL 4.9 billion as of October 2008 bringing the primary surplus to YTL 38.5 billion. Total revenues increased by 12.7% to YTL 175.8 billion and total expenditures increased by 7.4% to YTL 180.7 billion in the January- October period 2008 compared to the same period of 2007. The gross privatization revenues in 2008 were recorded as US$ 6.3 billion. The breakdown of the privatization revenues is as follows; US$ 2 billion as block sale, US$ 1.9 billion as public offering and US$ 2.3 billion as asset sale. In 2008, the ISE National-100 Index, the main index on the Istanbul Stock Exchange, showed a decrease of 51.6% in YTL terms and 63.2% in US$ terms as compared to the values at the end of 2008. The stock market yearly total traded value decreased to US$ 261.3 billion by 13.2% in US$ terms in 2008 compared to 2007. The average daily traded value of equities stood at US$ 1.04 billion in 2008. Key Information Contacts Capital Markets Board of Turkey www.cmb.gov.tr ISE Settlement and Custody Bank Inc.(Takasbank) www.takasbank.com.tr Central Registry Agency Inc. www.mkk.com.tr The Association of Capital Market Intermediary Institutions of Turkey www.tspakb.org.tr The Turkish Derivatives Exchange (TurkDEX) www.turkdex.org.tr PAGE 74 The market capitalization of 317 ISE traded companies decreased to a level of US$ 119.7 billion at the end of 2008 from US$ 290 billion at the end of 2007. Nine ETFs (Exchange Traded Fund) are traded on the ISE ETFs Market in 2008. The net equity investments within the free float of the ISE traded companies by foreign portfolio investors has been registered at around US$ 27.5 billion at the end of 2008 representing 67.5% of the total value stocks in custody. The turnover in public debt securities transacted on the Outright Purchases and Sales Market decreased by 14.2% to US$ 239.4 billion in 2008 compared to 2007. The Repo/Reverse Repo Market turnover increased by 14.1% to US$ 2,274 billion in the same period. The average daily traded value in Outright Purchases and Sales Market and the Repo/Reverse Repo Market, stood at US$ 10 billion at the end of 2008. In 2008, two companies and one Exchange Traded Fund (ETFs) offered their stocks for the first time to public and started to be traded on the ISE Stock Market. The amount of funds raised by the IPOs of two companies was US$ 1.9 billion. All brokerage houses (104 brokerage houses) have been provided with remote access to the stock market trading system. In 2008, the number of orders sent by members via Ex-API (Express Application Programming Interface) terminals reached 92% of all orders. Trading on the Bonds and Bills Market is already carried out remotely. * * Information provided by the Istanbul Stock Exchange