Borsa Istanbul: An Exciting Investment Opportunity in Turkey

AUGUST 21, 2023

Turkey, as a developing nation, offers substantial investment opportunities, and in recent times, Borsa Istanbul has emerged as a leading avenue for investors. The equity market has shown remarkable growth, surging by an astounding 167 percent in the past year alone and achieving an impressive 430 percent increase from 2021 to 2023. Despite the devaluation of the Turkish lira, there is a reasonable expectation that the upward trajectory of the stock market in terms of the US dollar will persist, continuing to provide attractive investment prospects (Table 1).

Table 1: BIST 100 Index Performance (2021-2023)

Date Index Value
January 2021 1,434
July 2021 1,524
December 2021 1,842
January 2022 1,887
July 2022 2,611
December 2022 5,238
January 2023 5,192
July 2023 5,292
August 2023 7,592
Total Increase (%) +429.42
Source: BIST 100

Unprecedented Growth:

Excluding the impacts of inflation and Turkish lira depreciation, we observe a remarkable 125 percent surge in Borsa Istanbul over a span of 2.5 years. This astounding growth can be attributed to the expansion of Turkish enterprises and the enhancement of production capabilities. Key drivers for this progress include the transportation, defense industry, real estate, and energy sectors, which have outpaced other industries in terms of value appreciation (Graph 1).

Graph 1: BIST 100 Value Over the Years (Billion USD)

In 2021, the collective worth of Borsa Istanbul stood at $131 billion, a figure that surged to $294 billion by 2023. Among the listed enterprises, Turkish Airlines shines as a high-value entity, surpassing its peers in profitability. The positive trajectory of Turkish Airlines’ performance is expected to endure post-pandemic, promising increased gains for its stakeholders in the times ahead (Graph 1 and 2).

Graph 2: Turkish Airlines Stock Prices (US Dollar)

Turkish Airlines serves as a prime example of the value surge witnessed in Borsa Istanbul, showcasing extraordinary growth of over 800 percent over 2.5 years. This exceptional performance places it ahead of competing international airlines in terms of value appreciation (Graph 2).

Global Comparisons:

Comparing the value escalation in Borsa Istanbul to stock markets in other countries (Poland, Brazil, Denmark, Japan, and Mexico) is insightful. However, it’s important to note that many global stock exchanges have fallen short of mirroring the remarkable ascent witnessed in Borsa Istanbul. Notably, both developed and developing countries’ stock markets have been unable to achieve equivalent gains to those realized by investors in Turkey (Table 2).

Table 2: Stock Market Performance by Country (2022-2023)

Country Rise (%)
Turkey (BIST 100) +167.96
Poland (WIG) +25.75
Denmark (COPENHAGEN) +23.56
Italy (ISEQ) +22.63
Croatia (CROBEX) +21.58
EU (EU50) +14.55
Japan (JP225) +13.85
Pakistan (KSE 100) +13.03
USA (USNDX) +11.24
Mexico (IPC) +10.17
Brazil (IBOVESPA) +5.33
Source: Trading Economics

In conclusion, Turkey’s Borsa Istanbul presents a compelling investment opportunity with its remarkable growth, even amidst currency challenges. The equity market’s continued surge and the exceptional performance of companies like Turkish Airlines make it an attractive prospect for both domestic and international investors. Moreover, when compared to global counterparts, Borsa Istanbul stands out as a thriving stock market.

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