Turkey to upgrade non-banking segment of finance sector

ISTANBUL

Turkey is focused on upgrading the segment of non-banking financial institutions in the finance sector, the head of the presidency's Finance Office said Monday.

President Recep Tayyip Erdogan is determined on this issue and the office is working hard to improve the non-banking finance sector, including participation financing, Goksel Asan stressed during the opening ceremony of World Investor Day organized by the International Organization of Securities Commissions (IOSCO).

"We are looking at [the non-banking finance sector] in a much broader framework. We will also share new developments and arrangements about this with you over time," Asan said.

A non-banking financial company, also known as non-banking financial institutions, are companies that offer financial services and products but are not officially recognized as a bank with a full banking license.

Touching on the Istanbul Finance Center project, he said the building is not aimed to be filled with banks.

"We want to fill it with non-banking segments as much as possible," he said.

He noted that the center is expected to be completed as of the second half of 2022.

The center will provide opportunities to develop Borsa Istanbul's relations with other exchange markets in Turkey's region, he added.

- Investor interest increases in stock market

Ali Fuat Taskesenlioglu, chairman of the Capital Markets Board of Turkey, said the number of domestic investors trading in Turkey’s stock market has reached 1.9 million, an all-time high.

The search for alternative incomes, new public offerings and ease of transactions has seriously increased investor interest in the stock market, he stressed.

During the last year, investors' capital value also reached 600 billion Turkish liras ($77.6 billion) from 380 billion liras ($49.2 billion), he added.

- Historic high level in daily trading volume

Hakan Atilla, managing director of the Istanbul Stock Exchange, noted that a significant inflow of foreign investors was seen in Borsa Istanbul during the past week thanks to the positive messages Erdogan sent last week.

Last Wednesday, Erdogan vowed to open a new era to improve the investment climate in the country.

Following his speech, the US dollar/Turkish lira exchange rate fell rapidly to below the 7.90 level while it was around 8.5 the previous week. Borsa Istanbul's BIST 100 index also hit an all-time high close Friday, surpassing 1,291 points.

Atilla recalled that daily trading volume also posted historic high levels of 60 billion Turkish liras ($7.77 billion).

"We saw very serious volumes in our precious metals and diamond market due to the rise in gold and silver prices, driven by virus-related economic uncertainty," Atilla noted.

Erisah Arican, chairperson of Borsa Istanbul, said an upward trend in the number of new investors in the stock exchange despite the economic shrinkage was pleasing.

"This has great importance for the development and deepening of capital markets," Arican stressed.

Tevfik Eraslan, head of the Turkish Capital Markets Association, stressed during the World Investor Week event at Borsa Istanbul that this week, investing experts, sector representatives and academics will share their experiences and information.

*Writing by Gokhan Ergocun and Tuba Sahin