Single brokerage reportedly driving unexpected, dramatic Istanbul stock market rally

By bne IntelliNews March 9, 2017

A single brokerage, Istanbul-based Yatirim Finansman, has emerged as being behind the largest trades on two-thirds of the Bourse Istanbul’s most tumultuous days so far in 2017, Bloomberg reported on March 8. On each of those days - 12 in all - the benchmark BIST-100 index has either gained or lost at least 1% d/d.

Yatirim Finansman was either the biggest buyer or seller on 8 of the 12 days, data from the stock exchange showed.

Last year, Seniz Yarcan, CEO of Yatirim Finansman, told local business daily Dunya that a big fund trading with algorithms was behind the large daily volumes. Local traders have since then referred to this large trader in question as "The Dude".

"I’m a little tired of finding a sole brokerage behind the big-move days. Turkish stocks were not expensive, and there were attractive fundamentals. But when it runs to a record from deep levels so quickly, it makes one jittery”, Burak Cetinceker, a money manager at Istanbul-based Strateji Portfoy, told Bloomberg.

Last month, the Turkish capital markets board (SPK) punished three investors responsible for irregular pricing action with two blue chips, Turkcell and Koc Holding, after both companies inexplicably lost 10% on February 22. Almost all of the sell orders were placed by a single equities house, Finans Invest. Algorithmic trading was to blame for the sudden moves in the shares of Turkcell and Koc Holding, analysts concluded.

The stock exchange rally started in December, defying the gloomy economic outlook, rising political tensions and security risks. The BIST-100 hit a 25-month high of 91,045 on March 6, but since then has moved to a sharp decline. The index was down 0.19% d/d to 89,311 at around 17:30 local time on March 9, while the lira was trading at 3.7486 against the USD, up 0.03%. 

The central bank reported on March 9 that the BIST-100 attracted $134mn worth of inflows during the week ending March 3. Portfolio inflows have thus amounted to a total of $1.14bn so far this year.

 

 

NON-RESIDENTS' HOLDINGS OF EQUITY AND GOVERNMENT DOMESTIC DEBT SECURITIES ($ mn)
(Market Value) 03/03/17 24/02/17 17/02/17 10/02/17 03/02/17 27/01/17 20/01/17
STOCK              
EQUITY 40,353.00 40,877.00 39,819.70 39,480.30 38,774.10 35,782.30 35,627.40
GDDS (*) 25,329.20 26,247.60 25,262.50 24,977.40 24,981.60 23,964.40 24,424.10
Repo 2,054.40 2,113.50 2,029.70 2,027.10 2,010.10 1,939.20 1,955.00
Private Sector 868.5 878 848.6 843.6 833.5 833.7 839.2
NET TRANSACTIONS (Adjusted for Foreign Exchange and Market Price Effects)              
EQUITY 133.5 50.9 -49.9 121.3 348.8 32.7 456.3
GDDS (*) -99.4 258.4 166.2 -261.7 169.7 -321.5 -156.5
Repo 0.8 15.6 -2 -6.5 7.6 1 -11.6
Private Sector -9.4 29.4 5 10.1 -0.2 -5.5 17.2
source: tcmb

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