In 2021, Borsa İstanbul hit record in the number of IPOs with 52 companies.
The previous record was in 1990 with 35 companies.
Assessing the year 2021, Korkmaz Ergun, the CEO of Borsa İstanbul said the following: “Last year, Borsa İstanbul set records in the number of companies launching an IPO, the number of investors, index values and trading volumes.”
Borsa İstanbul CEO Korkmaz Ergun made an overall assessment of the year 2021. Noting that 2021 was a successful year in many respects, Ergun stated: “2021 was a successful year for capital markets as the markets reached all-time highs in the number of IPOs, the number of investors, index values and trading volumes. All services were provided uninterruptedly despite the ongoing effects of the pandemic. Moreover, efforts to develop new financial products and services according to the needs of the market continued unabated. The industry went through a difficult test, yet we were able to keep up with the changing conditions successfully. We have worked devotedly in cooperation with all the stakeholders in the industry.”
Records in IPOs and in the number of investors
Mentioning that as Borsa İstanbul, they have achieved a transformation in their business model last year, Ergun stated “We are no longer a stock exchange that only reviews the application of companies after they apply to be traded. We have transformed into a stock exchange that solves and supports the problems of our companies, if any, before the application, at the decision stage and the preparation stage. By visiting our companies, we aim to explain that IPOs and capital markets are among the main pillars of the economy. We cooperate with chambers of industry and commerce. We will continue to do so in the forthcoming periods.
The number of IPOs was the most important record we achieved in 2021. A record hit in the number of IPOs with 52 companies. The size of the IPOs was 21.6 billion TL. In 2020, 8 companies launched an IPO worthing 1.1 billion TL. The previous record was in 1990 with 35 companies. Among the World's stock exchanges, Borsa İstanbul rose by 14, ranking 13th in terms of the number of IPOs. This year, companies from many sectors operating in different cities of our country such as İstanbul, Ankara, Aydın, Balıkesir, Denizli, Erzurum, İzmir, Kayseri, Kocaeli, Konya, Kütahya, Manisa and Rize joined us. We have supported our companies to access the long-term financing they need. We aim to strengthen the equity capital of companies. Our goal is to ensure that every year, a great number of large companies that contribute to the growth of our country finance their investments through an IPO. The “long-term TL” that our companies need for their investments is only available in the capital markets and at Borsa İstanbul. In 2021, with debt instrument issuances, 258.5 billion TL resource was provided through capital markets. As they are the key instruments in the growth of our country, we invite companies that produce, invest, export and create employment to the stock market to finance their investments and growth through capital markets.”
Ergun further stated the following: “While 1.2 million citizens had shares at the beginning of 2020, this number increased to 2.4 million at the end of 2021. The growing number of retail investors increases our responsibilities, and we are fully aware of it. We take steps to inform our investors about financial literacy and to protect investor interests.”
Increasing market trading volumes
Ergun highlighted that records set in the daily trading volumes with 91.2 billion TL in the Equity Market and 69.4 billion TL in the Derivatives Market in 2021. He further added that the average daily trading volume in the Equity Market was 30.2 billion TL, surmounting 2020, which has an average daily trading volume of 26.2 billion TL. Moreover, Ergun also noted that Derivatives Market compelled the attention of the investors.
Market-friendly and innovative steps
Pertaining to the products and services introduced in 2021, Ergun made the following remarks: “Increasing the depth of capital markets and providing investors with various investment opportunities, our financial products contribute to the development of our country. Within this perspective, market-friendly and innovative steps were taken in 2021, as we focused on the growth and deepening of the markets.
A precious metal warehouse at international standards was launched, and custody services have been provided to international investors. Three new gold-based indices, namely the BIST Spot Gold Index, BIST Gold Bond and BIST Gold Denominated Lease Certificate started to be calculated on July 7. Thus, our corporate investors had the opportunity to invest more in Gold Bonds and Gold-Denominated Lease Certificates issued by our Treasury.
In order to increase the product diversity, platinum and palladium futures contracts were also launched on September 17 to trade gold and silver as well as different precious metals in the derivatives market.
The methodology of our Sustainability Index was updated on October 1 to encourage our companies to comply with sustainability criteria more effectively.
On October 19, Borsa İstanbul became one of the 11 founding members of the Derivatives Exchanges Network created by the United Nations Sustainable Stock Exchanges Initiative, of which we are one of the founding members.
On October 22, Borsa İstanbul launched USDTRY Futures and Options Contracts, in order to help companies with foreign currency positions on their balance sheets, notably real sector and foreign trade companies, to better manage exchange rate risks.
Consisting of companies operating in line with the principles of participation, 5 Participation Indices; namely BIST Participation All, BIST Participation 100, BIST Participation 50, BIST Participation 30, BIST Sustainability Participation Index were started to be calculated on November 12, for investors who want to invest according to the principles of participation finance. Companies operating in compliance with participation finance criteria have thus had the opportunity to reach a wider investor base.
On December 16, the necessary work was completed to launch Physically Delivered Government Bond Futures Contracts. These contracts will enable the financial sector and institutional investors to manage their interest rate risks more effectively, increase the depth in the Debt Securities Market by ensuring the interaction between the spot/futures market, and create more efficient prices.
In order to raise the standards of the calculated indices and improve their international validity, the preparatory work on the compliance of the indices with the Principles of IOSCO, International Organization of Securities Commissions was completed on December 27.”
Active participation to International Organizations
Elected as a Board Member of the World Federation of Exchanges (WFE) in September, Ergun hold the following regarding their work in the international arena: “We have started initiatives to be more effective in international platforms. We have actively been engaged in the al sub-committees of the WFE. Furthermore, meetings were held with the CEO’s of other exchanges and cooperation opportunities began to be developed.
Carrying out activities within the scope of the Organization of Islamic Cooperation (OIC) Exchanges Forum, whose secretariat is conducted by Borsa İstanbul, interaction with the exchanges of Islamic countries continued to be strengthened and joint projects were carried out. Efforts to issue an investment fund based on S&P/OIC COMCEC 50 Shariah Index yielded results and the first investments were made. We aim to introduce the fund in all OIC countries and to reach a wider investor base in 2022.
In 2021, Borsa İstanbul Review, which is a peer-reviewed international academic journal that includes articles in the field of finance and indexed in Social Science Citation Index (SSCI), the highest standard in the field of social sciences, ranked 31st among 108 journals in the finance category. In 2021, nearly 1000 articles were reviewed for Borsa İstanbul Review and 5 issues were published.
Taking OECD Due Diligence Guidance for Responsible Supply Chains into consideration, new regulations have been prepared for the supply of gold and the necessary legal infrastructure has been created to ensure world-class gold imports.”
Capitalizing that they have achieved a transformation in the field of technology, Ergun stated: “According to the data of the World Federation of Exchanges, we are the most liquid stock exchange in the world. Borsa İstanbul markets operate in an integrated manner on a single, end-to-end platform. Our technological infrastructure, namely BISTECH is one of the world's leading systems in terms of speed and accessibility. We are a stock exchange that expands the data center to provide fast and secure market access for investors, offers alternative access opportunities according to different needs, and provides services at international standards.
Based on the needs of the Borsa İstanbul markets and systems, new versions of technology services have been successfully developed and commenced in 2021. As the new versions bring along many innovations, particularly the launch of the BAP Tescil System integrated with the BISTECH System (it was working in integration with the OTASS System) enabled the registration notification to be made at once by members and daily reporting to be adapted accordingly. By the same token, the transfer of the Swap Market that includes the Currency Swap Market and the Precious Metals Swap Market, which was also operated in the OTASS System, to the BISTECH System was a significant development in terms of the integrity of the markets.”
Ergun also stated that they continue to expand their product range with the new data packages.
Ergun further maintained that they focus on financial literacy as well, in order to create social benefit and raise financial awareness, and they arrange publications, webinars and summits concerning the subject. He also noted that they carry out effective projects with visual and written publications on social media.
Outstanding financial performance
Pertaining to the financial performance of Borsa İstanbul, Ergun contended as follows: "By the increase in trading volumes in 2021, trade-based revenues, new financial services and products we offer, data and technology revenues, and the increase in IPOs, Borsa İstanbul's financial performance has also heightened compared to the last year. At the end of 2021, our net profit increased by 44 percent to 2.07 billion TL.
A year full of operational and financial achievements and market innovations
Ergun concluded his remarks with the following: “In a nutshell, 2021 was a year full of operational and financial success and market innovation. Meanwhile, it was a period in which communication and interaction with our stakeholders have further bolstered. I would like to express my deepest thanks to all my colleagues who have contributed to our operational and financial success in 2021.
In the period to come, we will make every effort to take steps to strengthen our capital markets and offer products and services that meet the needs of investors and companies with the support of our stakeholders. With our mission of providing a secure, transparent, efficient, fair, innovative, competitive and sustainable trading platform for all investors, improving the opportunities offered by our capital market is essential for development. In this respect, we will pursue a goal by which more companies have the opportunity to reach resource procurement on the supply side, a wider investor base is reached on the demand side, and new financial products and services are developed according to market needs, in sum, we will focus on the growth of markets. In the forthcoming period, we will persevere in working in order to make İstanbul an international financial center, embracing a vision set forth by our Esteemed President and developing our capital market.”
