Islamic Development Bank in talks to buy Istanbul stock exchange stake

By bne IntelliNews April 19, 2017

Saudi Arabia-based Islamic Development Bank (IDB) is in talks to buy a stake in Turkey’s stock exchange, Borsa Istanbul, Himmet Karadag, chairman of BIST, told Reuters on April 19.

With a market capitalisation of more than $200bn, Borsa Istanbul is one of the largest stock exchanges in its region. Majority-owned by the Turkish government’s newly established sovereign wealth fund, it is the sole exchange entity in Turkey. It was created in 2013 by combining the Istanbul Stock Exchange, the Istanbul Gold Exchange and the Turkish Derivatives Exchange.

The European Bank for Reconstruction and Development (EBRD) acquired a 10% stake in Borsa Istanbul in December 2015. Also, NASDAQ has a 7% stake in BIST.

Karadag did not talk about the size of the stake in question. However, he said they expect to complete talks by the end of 2017. Borsa Istanbul will evaluate IPO options after completing talks with IDB, Karadag also told Reuters.

IDB was targeting the completion of the acquisition of a 10% stake in BIST in 2-3 months as part of wider efforts to develop Islamic finance in Turkey, Abdulhakim Elwaer, a director at IDB, told the news service on April 18.

Last November, IDB and BIST signed a cooperation agreement.

IDB has invested more than $10bn in Turkey since 1977. The Islamic lender’s investments in the country amounted to $1.4bn in 2015 and $1.5bn in 2016.

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