Turkey’s initial public offering market is taking off as companies with limited options for fresh financing seek to take advantage of local investors’ appetite for new issues.
More than 20 companies have so far completed the process of listing and have started trading in Turkey during 2023, raising about 26 billion liras in total, or about $1.33 billion, based on the average exchange rate this year.
That’s already ahead of last year in both dollar and local-currency terms and the most in liras in records going back to 2010 on the Turkish Capital Markets Board’s website.
The pace is picking up as companies look to domestic savers for capital at a time when accessing loans in Turkey has become harder.
The central bank’s management of loan rates since last year has left banks with little incentive to lend to second-tier clients, while regulators were also pressuring commercial lenders to prioritize exporters and smaller businesses that account for nearly three-quarters of the job market.
“IPOs are the easiest and most available source of financing for companies at most favorable costs,” said Tuna Cetinkaya, assistant general manager at the Info Yatirim brokerage.
“So there are many more companies looking to tap locals’ appetite, and we’ll likely see more companies getting listed this year than 2022.”
With at least 10 more firms having announced the start of the process to get listed, and many more waiting in line, the market is on track to narrow the gap with, and potentially surpass, 2021’s record number of 52 IPOs, data from Borsa Istanbul show. In 2022, there with 40 IPOs worth a total 19.3 billion liras.
While local buyers have been enthusiastic for IPOs, foreign investors have largely remained on the sidelines.
Concerns over Turkey’s unorthodox economic policies and a weakening currency have sent foreign ownership in Turkish stocks to a record low of 27 percent, and it continues to hover near those levels.
Total foreign investment in Turkish stocks stands at about $23.2 billion, down from about $78 billion a decade ago.
Should there be a return to conventional economic policies, that may increase foreign investors’ appetite for Turkish equities, also possibly reflecting on IPO markets as well, according to Cetinkaya.
Investors and strategists have raised bets on a gradual return to economic orthodoxy after President Recep Tayyip Erdogan revamped his cabinet when he won another five-year term in May.
He has also signaled some “flexibility in monetary policy, seen as opening the way for a shift from unconventional measures that stoked an inflation crisis.”
The appointment of two former Wall Street bankers to the country’s new economy team has fueled optimism in Turkish stocks, even if international investors remain cautious.
IPO Index
The Borsa Istanbul IPO Index, which tracks stocks that have listed in the past two years, has soared 2,060 percent since the start of 2020, when local mom-and-pop traders’ frenzy for Turkish stocks began to climb amid rising inflation and diminishing returns from fixed-income products as the government kept interest rates low.
That raised questions regarding the sustainability of the move. Lackluster returns in fixed-income assets in recent years and high inflation have made stocks the most favorable investment option for local investors. That said, local appetite for stocks started to dwindle ahead of the elections amid a surge in lira deposit rates.
While the IPO index is down 6.9 percent this year, short-term spikes in the first few trading days of newly listed stocks still continue to a large extent, keeping demand from domestic retail investors strong.
Crown Prince of Abu Dhabi meets with CEOs of leading Norwegian companies
H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, has met with a group of CEOs from leading Norwegian companies, as part of their participation in the UAE-Norway Investment Forum, held alongside his official visit to the Kingdom of Norway.
During the meeting, H.H. Sheikh Khaled bin Mohamed bin Zayed underscored the UAE leadership’s commitment to strengthening economic cooperation with its international partners.
He highlighted that investment in innovation and knowledge is a cornerstone for achieving sustainable development, noting that enhancing collaboration with Norwegian companies across key sectors will open new avenues for mutual economic growth between the two countries.
The UAE-Norway Investment Forum, taking place in Oslo, aimed to highlight available investment opportunities and strengthen trade relations between the UAE and Norway, fostering shared interests and supporting innovation and knowledge-based economic visions.
At the Indonesia International Book Fair 2024, TRENDS inaugurates 10th global office, releases four books
As part of its Asian research tour, partnership with Aletihad News Center, and
primary sponsorship of the Indonesia International Book Fair 2024, TRENDS
Research & Advisory inaugurated its office in Jakarta, marking its 10th location
worldwide. It also released four books in Indonesian.
The inauguration event was attended by ambassadors of the UAE, Bahrain, and
Jordan to Indonesia, chairpersons of the UAE and Indonesian Publishers’
Associations, the Director of TRENDS’ Jakarta office, and a group of researchers
and academics.
Speaking at the event, Dr. Mohammed Abdullah Al-Ali, CEO of TRENDS
Research & Advisory, stated that TRENDS’ international offices—set to reach 15
by the end of 2024—aim to enhance the Center’s research efforts and deepen its
role in disseminating knowledge, thus serving as a global knowledge bridge.
He emphasized, “At TRENDS, we believe in the importance of cooperation
between think tanks and prioritize this endeavor. We believe the TRENDS office in
Jakarta will enhance the exchange of knowledge and ideas between think tanks in
Asia and the Middle East, opening new horizons for collaboration in various
fields.”
Four books in Indonesian
As part of the Jakarta office’s inaugural activities, four books were released in
Indonesian, including the 11th and 12th books of the Muslim Brotherhood
Encyclopedia and Global Trends in AI and Automation and the Future of
Competition between Man and Machine: An Analytical Forward-looking Vision.
Hostility to Arab states
The 11th book of the Muslim Brotherhood Encyclopedia, The Concept of the State
According to the Muslim Brotherhood, highlights its hostile stance toward Arab
states since its inception. The group views them as an obstacle to its ascent to
power. It opposed the modern principles upon which these states were built,
considering them incompatible with the group’s unique interpretation of Islam,
which it claimed to embody exclusively.
Exclusion of nonconformists
The 12th book, The Muslim Brotherhood: Rejection of Tolerance and Exclusion of
Nonconformists, examines the Muslim Brotherhood’s stance towards
nonconformists, individuals, and entities. The book reveals the group’s binary view
of the world, categorizing others as allies or adversaries. It ties these relationships
to the Brotherhood’s internal power struggles and self-serving interests.
Global Trends in AI
The third book, Global Trends in AI, explores significant developments in AI and
its impact on various aspects of life, including the economy, society, and
governance. It also offers a comprehensive analysis of technological advancements
in AI, its applications across sectors, the ethical and social challenges it presents,
and its future trajectory.
Automation
The fourth book, Automation and the Future of Competition between Man and
Machine: An Analytical Forward-looking Vision, addresses the growing challenges
faced by the human workforce in the face of widespread automation and AI
applications. The book concludes that while automation presents a significant
challenge to the labor market, it simultaneously creates new opportunities. It
emphasizes the importance of preparing for this shift through skills development,
continuous education, and adopting economic and social policies that support the
workforce.
Prominent pavilion and active presence
The TRENDS’ pavilion at the Indonesia International Book Fair has attracted
numerous visitors, including academic researchers and officials, such as the
ambassadors of the UAE, Bahrain, Qatar, Jordan, and Turkey. Additionally,
chairpersons of Arab and Indonesian publishers’ associations, authors, publishers,
and students visited the pavilion. All were impressed with and praised TRENDS’ diverse, valuable publications. They also commended TRENDS’ active
international presence and ability to address global developments with rigorous
analytical research.
Dr. Mohammed Abdullah Al-Ali honored the esteemed guests, including
ambassadors of the UAE and Bahrain to Indonesia, Wedha Startesti Yudha,
Chairperson of the Indonesia International Book Fair Committee, Arys Hilman
Nugraha, Chairman of the Indonesian Publishers Association, and others,
presenting them with TRENDS’ publications and commemorative shields.
Additionally, he awarded TRENDS’ Research Medal to Ni Made Ayu Martini
Indonesian Deputy Minister of Marketing, Tourism and Creative Economy
It is worth noting that during its current Asian research tour, TRENDS announced
the launch of the TRENDS Research Medal, awarded to individuals who make
significant contributions to the development of scientific research and promote collaboration with TRENDS in strengthening a culture of research across various fields.
US determined to prevent full-scale war in Middle East, Joe Biden tells UNGA79
US President Joe Biden highlighted the US Administration’s determination to prevent a wider war that engulfs the entire Middle East region, noting that a diplomatic solution “remains the only path to lasting security to allow the residents from both countries to return to their homes on the border safely”.
In remarks he made today before the 79th Session of the United Nations General Assembly (UNGA79), the US President said, “Full-scale war is not in anyone’s interest,” adding that a diplomatic solution is still possible.
He also touched on “the rise of violence against innocent Palestinians on the West Bank”, and the need to “set the conditions for a better future”, which he said featured “a two-state solution, where the world — where Israel enjoys security and peace and full recognition and normalised relations with all its neighbours, where Palestinians live in security, dignity, and self-determination in a state of their own”.
President Biden underscored the ceasefire and hostage deal put forth by Qatar and Egypt, which the UN Security Council endorsed. He said, “Now is the time for the parties to finalise its terms, bring the hostages home,” adding that this would help ease the suffering in Gaza, and end the war.