Participation Indices

Participation Indices

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.

Advisory Board

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 Turkey (TKBB), and are based on the "Share Certificate Issuance and Trade Standard" (Standard) created by the Advisory Board. Since some of the data needed while evaluating the compliance of companies with the Standard cannot be accessed from publicly available sources, such data are requested from companies through Forms created on the Public Disclosure Platform (PDP) system. The answers given by the companies in the Forms are directly transferred to the database without being published on the PDP and can be reported by Borsa Istanbul to be used only in the periodic review of the indices.

Questions from companies, investors or other interested parties regarding matters that are not expressly included in the Standard are forwarded to the Advisory Board and an evaluation is made based on the answers received. In line with the opinions of the Advisory Board, supporting documents has been prepared to guide companies, and aforementioned document is updated as needed. These documents has been prepared within the framework of the opinions of the Advisory Board, which can be expressed as a general rule, and to include the opinions about the facilities of a limited number of companies that need to be detailed.

 Determination of the Constituents of Indices

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 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%,

               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%.

               Company shares exceeding the specified rates are excluded from the scope.

Companies are required to answer the questions regarding the financial period in the Forms, based on the most recent annual or 6-month financial statements that have been, even if limited, independently audited. Companies that do not enter the 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. In order for companies to be included in periodic reviews, they must be traded for at least 20 trading days as of the end of the Review Period.

 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 Sustainability Participation 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.

Other details on the indices can be accessed from the BIST Market Cap Weighted Stock Indices Ground Rules.

Weight Limitation on Indices

The weights of the shares in the BIST Participation 30, BIST Participation 50, BIST Participation 100 and BIST Sustainability Participation 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%.

Calculation Start Dates

Indices started to be calculated from closing prices as of 1 October, 2021 and from real time prices as of 12 November, 2021.

Related Links

Please click for the updated BIST Non-Market Cap Weighted Stock Indices Ground Rules.

Please click for BIST Market Cap Weighted Stock Indices Ground Rules.

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) and BIST Sustainability Participation (XSRDK).