Why is the volatility high in Borsa Istanbul?
The earthquakes in Kahramanmaraş, electoral uncertainty and growing concerns about the banking sector in global markets increased volatility in Borsa Istanbul.
While the BIST 100 index in Borsa Istanbul, which provided a return of about 200 percent last year, got off to a weak start in 2023, after the earthquakes in Kahramanmaraş, the Board of Capital Markets, Borsa Istanbul, Agency for Supervision and Regulation of Insurance and Private Pensions and the Banking Regulation and Supervision Agency announced it, it is observed that the measures are a factor of support for the stock market.
On the one hand, expectations regarding the balance sheets for the first quarter of 2023 began to take shape. On the other hand, it is seen that volatility has begun to increase again due to the electoral mobility experienced on the political front.
On a global scale, despite concerns about the banking sector, after the European Central Bank (ECB) raised interest rates by 50 basis points, the US Federal Reserve (Fed) decided to continue with a hike of interest rates of 25 basis points, while selling increased the pressure on global stock markets.
After seeing its all-time high of 5,704.83 points on January 3, 2023, the BIST 100 Index, which was moving in a downward trend, fell about 20 percent from its high and hit its lowest level since beginning of the year with 4,479.69 points. . The index ended this week at 5,031.98 points with a loss of 2 percent.
WEAKENED RECOVERY EFFORT
Phillip Capital’s Domestic Markets Group Chairman Üzeyir Doğan said events both at home and abroad in recent months continue to destabilize markets.
Stating that the earthquakes in Kahramanmaraş in early February delayed expectations of a recovery in macroeconomic data, Doğan said: “While this situation caused volatility in the Borsa Istanbul wing, uncertainties brought about by the proximity of the elections weakened the efforts recovery of our markets”. saying.
BANKING CRISES ARE EFFECTIVE
Stating that the banking crises that started in the US and spread to Europe exceeded expected support from abroad, Doğan noted that these overlapping negativities suppressed Borsa İstanbul’s desire for an upward move. Doğan claimed that the purchases were made due to “perception of low cost” below 5,000 points on the BIST 100 index.
Stating that they anticipate elections and other negative factors to remain on the agenda for a certain period of time, Doğan said: “Especially in the second half of the year, a more predictable atmosphere will emerge abroad and at home, and therefore, although short-term volatility on Borsa Istanbul will increase in the coming months, the index will remain low over the medium term. We believe that it will break free of this impasse and create a new trend of its own.” saying.
POST-EARTHQUAKE STANDARDS WERE EFFECTIVE IN THE SHORT TERM
Alnus investment research director Volkan Dukkancik also stated that the effect of the new regulations announced after the earthquakes in Kahramanmaraş on February 6 had a positive effect on the stock market in the short term.
He said that the state contribution funds in the Private Pension System bought shares for about 10 billion TL and the news that the Wealth Fund could invest in the stock market subsequently supported the BIST 100 index higher.
ELECTION UNCERTAINTY HIGHER volatility
“In this process, on the one hand, expectations for the balance sheets for the first quarter of 2023 began to take shape and, on the other hand, we see that volatility began to increase again due to electoral activity on the political front.”
Stating that investors are slowly beginning to adjust their positions for the election, Şık noted that expectations that inflation will end the year at 45-50 percent in 2023 appear to remain the driving force behind the stock market.
AFTER THE ELECTION SCENARIOS ARE DISCUSSED
Referring to the reports of foreign investment institutions that began to speak out about the election results and the economic policies to be followed after the election results, Volkan Mağazacık said that this indicates that foreigners are slowly starting to take Turkish assets on your radar.
Shopcik said:
“We will closely monitor foreign purchases and sales in both the stock and bond markets until the election. It is possible to say that we are cautiously optimistic, especially in the stock market, in this period in which we are entering a process of equations with many unknowns abroad and within.
As long as the BIST 100 index remains above 5,000 points, the previous peak of 5,700 will remain in the target position, so we think that at this stage, 50 percent of the portfolios can continue to be evaluated in equities.” (BRITISH AUTOMOBILE CLUB)