Trading volumes in one of Europe’s fastest growing economies were in the green zone despite the country facing uncertainty after its latest presidential elections. Total volumes across the board were up 15%, recovering from a dismal month of trading in July. The metrics highlight Turkey’s volatile nature as overseas investors keep one foot in the emerging market nation.
Borsa Istanbul, Turkey’s largest financial markets exchange, saw trading volumes increase in August. The venue suffered a dismal July where volumes dropped below the formidable three hundred billion mark for the second time during the year.
Turkey has been a magnet for overseas investors looking for high premiums in Turkey’s equities and bonds market. In August, the exchange reported total volumes of $304 billion, higher than its July figures of $265 billion.
The Borsa Istanbul is a by-product of a recent merger of Turkey’s cash and derivatives exchange. The new entity encapsulates the country’s vision to play host as a premier financial centre in the region, bridging Europe and Asia. Turkey sits strategically in the foothills of Eastern Europe and Western Asia.
Turkish bonds were the most popular listed instruments traded at the venue in August, fixed income products traded a total of $255 billion in notional value, followed by the country’s equity markets which totalled $34 billion and derivatives instruments which totalled $15 billion.
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In its derivatives product range the country offers a number of instruments, including Equity Indices, Currency Futures and a range of Precious Metals Futures & Options. Among its product range stock indices are the most popular instrument taking over 94% of market share in volumes, followed by currency futures.
Turkey is home to one of the most liquid currency markets outside of developed Europe, with over 25 active participants in the market, authorised and regulated by the country’s financial watchdog, the Capital Markets Board. Turkey is a role model for nations looking to add rules and guidelines in the OTC forex market.
Turkey’s political landscape has been evolving under the leadership of Tayyip Erdogan, the country’s leader for over a decade. During August, new presidential powers were sought during a referendum which Mr. Erdogan won, markets showed signs of uncertainty as the votes came in, with both Turkish bonds and the lira dropping.
Turkish bonds have seen a sharp rise in investor interest as yields on the instruments are regarded as ‘generous’ by global invests for investment-grade debt.