Foreigners gain $26.7 bln from stock market
Posted by meb at February 6th, 2008
Annual income of foreign investors in Turkey’s Istanbul Stock Exchange (IMKB) has reached $26.7 billion in 2007, revealed a survey in the monthly bulletin of the Association of Capital Market Intermediary Institutions of Turkey (TSPAKB). The figure has outpaced the aggregate profit of the last nine years, according to the survey by Gökben Altaş, titled “Foreign Investors.”
Foreign investors, who owned 55 percent of the stocks of public companies listed on the IMKB by the end of 2004, held 72 percent of stocks at the end of 2007. Over the period, foreigners’ share in transaction volume rose from 13 percent to 24 percent. By the end of 2007, foreigners’ share in both stock ownership and in transaction volume reached the highest level of the last 11 years.
In 2007, foreign investors purchased stocks worth $3.9 billion through public offerings and wholesale transactions. Apart from primary market transactions, foreigners purchased additional stocks worth $4.5 billion through secondary market transactions at the IMKB. Foreigners’ aggregate stock investment in 2007 reached $8.4 billion.
As of the end of December 2007, the portfolio value of foreigners in the Central Registry Agency Inc. of Turkey (CRA) was $70 billion. Foreigners’ portfolio value increased $26.7 billion.
Rally in 2007:
Due to the fluctuation in global markets in mid-2006, foreign investors’ portfolio value dropped $8.3 billion in the first half of the year. Thanks to a rally during the rest of the year, the damages incurred by foreigners fell to $822 million at the end of 2006. After a rally attained in the third quarter of 2007, foreign portfolios doubled their value, compared to the beginning of the year.
Foreign investors, who started 2007 with a portfolio value of $35 billion, invested $8.4 billion more, reaching a portfolio of $70.2 billion at the end of the year. Their annual value-increase earnings reached $26.7 billion, outpacing the aggregate profits of the last nine years.
Apart from 2000, foreign investors were regularly net stock purchasers. In the 10-year period as of 1998, foreign capital inflow through stock investment was $21.3 billion. Some $16 billion of this amount was attained in the last three years.
Storage balance of domestic investors was $26.8 at the end of 2007 while domestic portfolio value rose 11.4 percent. Domestic investors, who augmented their stock investments lastly in 2002, reduced their portfolio gradually and attained higher yields after 2002, when market conditions started to improve.
In the last 10 years, the yield of domestic investors was generally more than that of foreign investors, and their losses remained relatively lower. In 2007, the yields of domestic and foreign investors were equal, according to the survey. Up to last year, yield difference between domestic and foreign investors derived mostly from increasing foreign investments.
Foreigners went on purchasing as markets rose in recent years, attaining higher average costs. Their average yield was low at the end of the year, when their portfolio value and their investments were compared. Domestic investors, on the other hand, were constantly selling while markets were rising. They augmented their realized profits with each sale while their costs remained the same.
Domestic investors changed their portfolios more often compared to foreign investors, according to the survey. Domestic investors held portfolios only for a month on average.
Source: Turkish Daily News
Related posts: