Out-Law / Your Daily Need-To-Know

Borsa Istanbul forges new links to boost Turkey’s financial credentials

Out-Law News | 18 Aug 2014 | 11:41 am | 1 min. read

Borsa Istanbul said it plans to strengthen its derivatives market by creating links with other global institutions as part of its plans to turn Turkey into a leading financial centre.

Developing relationships with diamond bourses and precious metals trading institutions are among near-term goals for Borsa Istanbul, which was established in 2013 out of the merger of the former Istanbul Stock Exchange, Istanbul Gold Exchange and the Izmir-based derivatives exchange.

Borsa Istanbul confirmed this month that it had become a member of the Association of Futures Markets, the Futures Industry Association, the World Federation of Diamond Bourses and an associate member of the London Bullion Market Association.

Earlier this year, Borsa Istanbul entered into a partnership agreement with Nasdaq Omx aimed at giving the Turkish index a position as the market hub for the Eurasia region.

The chairman and chief executive officer of Borsa Istanbul Ibrahim Turhan said the Nasdaq partnership underlined “significant steps forward”, including development of a product range “that responds to the needs and demands of international investors” (100-page / 6.87 MB PDF).

Turhan said: “We initiated the trading of single stock options and futures in April 2013. Index future contracts traded on the Turkish Derivatives Exchange migrated to the Borsa Istanbul derivatives market in August.”

In addition, Turhan said scrap steel index future contracts with cash settlement and physical delivery planned to be introduced in 2014 “will play a critical role in establishing an efficient metals market in Turkey, where the steel industry is dominant”.

According to Turhan, electricity market legislation introduced in Turkey in March 2013 would also mean “a key role for Borsa Istanbul” in improving the energy market in Turkey. He said the law envisages Borsa Istanbul becoming a shareholder of the country’s new EPIAS (Enerji Piyasalari Isletme Anonim Sirketi) energy exchange.

Turhan said: “Thanks to both its geographical location and cultural connections with the countries of the Eurasia region, Turkey has important advantages on the way to become the region’s leading financial centre.”

The World Bank said in May 2014 that Turkey is emerging as “a global economic leader” following a major privatisation programme conducted over the past 40 years.

According to the bank, Turkey, with a gross domestic product of $786 billion, is the 18th largest economy in the world. “Fundamental reforms carried out after 2001 have allowed Turkey’s financial sector to remain relatively strong in spite of the global economic crisis,” the bank said.