Borsa Istanbul launched Participation Indices by evaluating the companies whose shares are traded in Borsa Istanbul according to the participation principles, in order for individual investors, who make their investment decisions on the basis of participation principles, to choose among companies operating in accordance with participation principles, to expand the awareness of companies on participation principles and to benefit more from funding opportunities in the participation finance sector.
The studies to determine the companies to be included in the indices are made with the cooperation of the Advisory Board within the body of the Participation Banks Association of Türkiye (TKBB), and are based on the "Share Certificate Issuance and Trade Standard" (Standard) and supporting documents and guide created by the Advisory Board.
Participation Finance Principles Information Form (Information Form) is created based on Standard and guide to assess companies whether they are eligible or not. The answers given in the Information Form by the companies that have just started trading are published in the IPO prospectus.
Companies are responsible for updating the data in the Information Form. They are expected to reply the questions in the Information Form based on Standard and guide.
While companies filling out the Information Forms;
- Share Certificate Issuance and Trade Standard,
- Guidelines to be taken as a basis for the determination of companies operating in accordance with the Participation Finance Principles (In Turkish)
needs to be taken into account.
Questions from companies, investors or other interested parties regarding matters that are not expressly included in the Standard or supporting documents and guide are forwarded to the Advisory Board and an evaluation is made based on the answers received.
In periodic reviews, while determining the constituents of the indices, the following stages are followed, respectively, by taking into account the answers given by the companies in the Information Forms according to the relevant financial statement period:
1) At the first stage, company shares that are not included in the BIST Stars Market, BIST Main Market or Sub-Market as of the beginning of the index period are excluded from the scope.
2) At the second stage, company shares that have financial privileges as profit or liquidation share privileges in company shares or usufruct shares are excluded from the scope.
3) At the third stage, if the activities listed in article 1.1 of the Standard are written in the articles of association of the company, the relevant company shares are excluded. The activities listed in article 1.1 of the Standard are as follows:
a) Production and trade of alcoholic beverages,
b) Production and trade of narcotic substances other than for medical purposes,
c) Gambling and gambling-like activities,
d) Production and trade of pigs and their products,
e) Financial transactions with interest,
f) Futures transactions between money and/or money-equivalent assets,
g) Publication contrary to morality and Islamic values
h) Entertainment, hotel management and similar activities do not comply with Islamic values,
i) Activities that cause great harm to the environment and living beings,
j) Biological/genetic activities to change human nature,
k) Production and trade of tobacco products that are harmful to health.
4) At the fourth stage, it is checked whether the companies exceed the following conditions;
a) The ratio of the revenues obtained from the activities specified in the Standard article 1.1 in the total revenues shall not exceed 5%,
b) The ratio of interest bearing assets in the financial statement to the higher of average market value or total assets shall not exceed 33%, (Total asset is used in calculation if number of traded days is less than 20 business days as of the Review Period end.)
c) The ratio of interest bearing debts in the financial statement to the higher of average market value or total assets shall not exceed 33%. (Total asset is used in calculation if number of traded days is less than 20 business days as of the Review Period end.)
Company shares exceeding the specified rates are excluded from the scope.
Companies are required to answer the questions regarding the financial period in the Information Forms, based on the most recent annual or 6-month financial statements that have been independently audited. Companies that do not enter into the Information Forms or have incomplete entries are excluded with precautionary approach, assuming that they do not meet the criteria. Companies that expressly declare in their articles of association that they will operate in accordance with the Standard are included in the index without considering any additional criteria, provided that they are traded in a market that is in the scope of the index. Companies start to be traded is included to the index on the first trading date if there is a statement in the IPO prospectus indicating the company meets all criteria of the index.
Calculated Participation Indices
The shares of the companies determined as a result of the above-mentioned stages constitute the scope of the BIST Participation All Index. BIST Participation 30, BIST Participation 50 and BIST Participation 100 Indices are formed by selecting companies with the highest trading volume and market value of their shares in free float among the companies within the scope of the BIST Participation All Index. There are 2 index periods for BIST Participation 30, BIST Participation 50, BIST Participation 100 and BIST Participation All indices as May-September and October-April.
The BIST Participation Sustainability Index was formed for investors who want to invest together in participation and sustainability themes. The scope of the index consists of the shares of companies that meet the selection criteria of BIST Participation All and BIST Sustainability indices.
For the investors, who are interested in investing to both participation and dividend themes, BIST Participation Dividend Index was formed. The scope fo the index consists of the shares of the companies that meet the selection criteria of both the BIST Participation All and BIST Dividend indices.
BIST Participation 30 Equal Weighted Return Index is calculated with the same constituents of BIST Participation 30 Index.
Other details on the indices can be accessed from the BIST Market Cap Weighted Stock Indices Methodology and BIST Non-Market Cap Weighted Stock Indices Methodology.
Weight Limitation on Indices
The weights of the shares in the BIST Participation 30, BIST Participation 50, BIST Participation 100, BIST Participation Sustainability and BIST Participation Dividend indices are limited to 10% at the beginning of the index period. If the weight of a share exceeds 15% during the index period, the weight of the shares exceeding 15% is reduced to 10%.
For BIST Participation 30 Equal Weighted Return Index, weight of all constituents is equalized at the beginning of index period. If free float market value of a constituent changes during index period for a reason except for price fluctuations, by re-calculating weighting factor, given constituent’s weighting will be equalized to last session close weighting before this change.
Calculation Start Dates
BIST Participation 30, BIST Participation 50, BIST Participation 100, BIST Participation All Shares and BIST Participation Sustainability Indices started to be calculated from closing prices as of 1 October, 2021 and from real time prices as of 12 November, 2021.
BIST Participation 30 Equal Weighted Return Index started to be calculated from real time prices as of 25 November, 2021 and BIST Participation Dividend started to be calculated from real time prices as of 21 November, 2022.
Please click for BIST Non-Market Cap Weighted Stock Indices Methodology.
Please click for BIST Market Cap Weighted Stock Indices Methodology.
Please click for Share Certificate Issuance and Trade Standard.
Please click for the constituents of BIST Participation All Shares (XKTUM), BIST Participation 100 (XK100), BIST Participation 50 (XK050), BIST Participation 30 (XK030), BIST Participation Sustainability (XSRDK) and BIST Particpation Dividend (XKTMT).