Borsa Istanbul’s benchmark BIST-100 index on August 21 hit a record 11,301 points. However, given the hyperinflationary conditions in the country, lira-denominated records do not actually make much sense.

Nevertheless, the all-time high is a significant development as the index had been hovering in a band of between 9,000 and 10,000 since January 2024 in response to the monetary tightening process launched in July 2023.

USD returns attractive too

Although the USD-denominated BIST-100 reading, currently moving around the 270s, is far from its historical highs around the 500-level, USD returns have also been getting attractive lately.

Chart: USD-denominated BIST-100.

The USD basis index is up from the 230s seen in June. As a result, Borsa Istanbul is the sixth best performing market in the world when you take a look at the last three months.

Table: Best performing ETFs in the world.

Monetary easing

At its last meeting held on July 24, the central bank's monetary policy committee (MPC) revived its easing cycle with the announcement of a 300bp rate cut.

As things stand, three consecutive rate cuts are on the cards during the remainder of 2025.

Foreign investor interest

Additionally, some foreign interest has been observed in non-resident flows to Borsa Istanbul. Between June 20 and August 15, Turkish equities enjoyed eight weeks of uninterrupted net inflows, bringing $1.4bn of fresh cash into the market.

Since April 11, the non-resident flows have been positive in 17 out of 18 weeks in total, with net inflows of $2.8bn.

Bull trap?

Where Borsa Istanbul is concerned, one must never overlook the possibility of bull traps, known as “keriz silkeleme” in Turkish.

For instance, the best performing BIST-100 component across the last month is 1000 Yatirimlar Holding (BINHO), chaired by Usame Erdogan (a son of Mustafa Erdogan, the younger brother of Turkey’s president, Recep Tayyip Erdogan).

In recent years, Usame Erdogan has been acing it when it comes to Borsa Istanbul. He also has partners with a reputation on the market.

On August 20, Bilge Yilmaz (@ProfBilgeYilmaz), an ex-politician of Iyi Party, wrote in a tweet that some brokerage houses and portfolio management companies were inflating the prices of some stocks in order to write down fictitious profits.

He did not name the companies or stocks but wrote that everyone knows their identities.

Foreign investor movement on the bourse

Lately, the local finance industry has also been circulating that the share of foreign investor holdings on the Borsa Istanbul has been on the rise. Based on market prices, their share rose into the 41%s as of August from the 35%s seen a month previously.

However, it could be better to follow nominal values, or numbers of shares, in terms of assessing the foreign investor share on Borsa Istanbul, as market anomalies and stock operations are not uncommon in Turkey.

The held share was up to 17.6% as of August 6 from a record low of 15.7% on April 8.

Chart: Foreigners’ share of holdings on Borsa Istanbul, nominal basis.

"Moustache" issue

Before buying Turkish equities, another term you need to be fully aware of is "the moustaches". An unknown proportion of non-resident holders of Turkish papers are actually Turks, also talked of as the “foreigners with moustaches” in the trade, who use foreign brokerage houses.

It is always a possibility that a bull trap is being set by registering some non-resident inflows that exist on paper only.

Must-have date for the diary, September 15

Last but not least, the finance industry has shown an interest in a trial concerning the main opposition Republican People’s Party (CHP) being conducted by the Ankara 42nd (Asliye Hukuk) Civil Court of First Instance.

The next hearing in this case will be held on September 15. The finance industry has indicated that Turkish markets will remain calm at least until then.

On June 11, bne IntelliNews noted: “A [government] seizure of the CHP or, in other words, the replacement of the current CHP management, is not something that can be envisaged for the near future.”

Do not, however, bet the farm on it. No one knows what Turkey's leader of 22 years Erdogan is planning. Perhaps, even he is not sure what his next step will be.

In the run-up to the September 15 hearing, he will keep a keen eye on moves made by CHP chair Ozgur Ozel.