Towards the Champions League
Along with Turkey, targeting to rank among the top 10 economies of the world, Borsa İstanbul’s conversion on the way to becoming a global actor is in progress. In addition to partnerships with global giants and regional exchanges, Borsa İstanbul moves forward with Research & Development and innovation.
Borsa İstanbul celebrated its 141st anniversary on December 29, 2014. Dating back to Dersaadet Bonds Market, Borsa İstanbul underwent a restructuring process in the last couple of years and demutualized. Within this framework, İstanbul Gold Exchange and Turkish Derivatives Exchange merged under the roof of Borsa İstanbul. Following the merger of the exchanges, Borsa İstanbul attained the efficiency and flexibility required for the process of branding and development of new products and markets.
In the World Competition Report it has been publishing since 2005, the World Economic Forum- WEF has been assessing countries on the basis of 12 factors and determines their competitive power. These 12 factors include a wide range of factors from infrastructure to macroeconomic data, from education to the efficiency of the labour market, as well as the development level of the finance and capital markets since the size and depth of the capital markets have a significant role in the economic structure of a country. The Turkish economy ranks 17th among world economies, while unfortunately, its capital markets is not among the top 20. Aiming to become an international financial center, İstanbul currently ranks 42nd among global financial centers. Therefore, as Turkey strives to become one of the top 10 economies of the world, that is, to rise to the champions league in economy, not only the real economy, but also the capital markets need to grow. In consideration of these facts, in order to grow and deepen the capital markets, in addition to the economy management, sector representatives from all segments are making a significant effort under the leadership of the Capital Markets Board and Borsa İstanbul.
Within the scope of the 2023 targets determined for the centennial anniversary of the Turkish Republic, the size of the economy is targeted to reach US$ 2 trillion; and that of the capital markets, to 70% of the GDP. During the annual meetings of the Word Bank and the International Monetary Fund (IMF) held in İstanbul in October 2009, İstanbul International Financial Center Strategy and Action Plan was announced to the public. Borsa İstanbul is positioned at the heart of the target of making İstanbul an international financial center, and sees the future years as a process of change-transformation.
Having attained a more dynamic structure through horizontal and vertical integration and the change of its legal structure, Borsa İstanbul accelerates its efforts to encourage public offerings and attract more investors to the market while making steps towards carrying Turkey to the upper league among world markets. Offering a more attractive market for investors, the infrastructure of the market is strengthened through technological investments.
In structuring Borsa İstanbul as a financial center, the priority lies in having a world-class technological infrastructure. In order to become a center of attraction for the capital markets of the region, Borsa İstanbul signed a strategic partnership agreement with the US-based NASDAQ Group, a leading exchange of the world. Furthermore, Borsa İstanbul continues to cooperate with the capital markets of the region on a variety of subjects from technology sales to market operation, and from product development to forming partnerships. Within this framework, Borsa İstanbul set its priorities as: becoming the region’s financial supermarket, the gate opening to international investors, and the financial technology and intellectual center of the region.
In order to carry Borsa İstanbul to global dimensions, and address various investor groups with varying risk-yield preferences, the portfolio of the products traded on Borsa İstanbul is improved on a continuous basis. In this process, sukuks were listed on Borsa İstanbul for the first time, turbo certificates started being traded on the Collective Products Market in the Equity Market, and futures contracts on Sarajevo Stock Exchange’s SASX-10 Index started being traded on VIOP. World Bank Global Islamic Finance Development Center was established. Borsa İstanbul Data Center, which will serve both domestic and foreign institutions was launched, and efforts to introduce energy products for trading on Borsa İstanbul are in progress.
İstanbul: Regional Hub, Global Actor Forum Series
İstanbul International Financial Center project marks an important phase with regard to making the Turkish economy reach its 2023 targets. In order for the project to be carried to the further stages successfully and İstanbul to become the indisputable center of the region and a leading actor of the global financial network, the project must be adopted by all stakeholders. Borsa İstanbul lies in the heart of İstanbul International Financial Center project, and organizes a series of forums entitled “İstanbul: Regional Hub, Global Actor” in order to promote the project and keep in close contact with investors.
The first Forum in Washington, D.C.
The first meeting of the forum series entitled “İstanbul: Regional Hub, Global Actor”, led by Borsa İstanbul was held with the participation of Deputy Prime Minister Ali Babacan in Washington, D.C. on October 11, 2013. The opening speech of the meeting was delivered by Mr. Babacan. As part of the Forum, a panel entitled “İstanbul: International Financial Center” was held with the participation of Borsa İstanbul Chaiman & CEO Dr. İbrahim M. Turhan. The panelists were NASDAQ OMX Vice President Meyer Sandy Frucher, World Bank Financial Systems Global Practice Manager Abayomi A. Alawode and Islamic Financial Services Board (IFSB) Secretary General Jaseem Ahmed.
At a press conference held prior to the panel, Borsa İstanbul Chairman & CEO Dr. İbrahim M. Turhan said that with the cooperation of the World Bank, Borsa İstanbul initiated the establishment of the first Islamic finance research and development center outside Washington, and that Borsa İstanbul will host the center entitled “Global Islamic Finance Development Center”.
New York Forum
The second of the forum series entitled “İstanbul: Regional Hub, Global Actor”, organized as part of the vision to make İstanbul a regional and international financial center was held in New York City with the participation of prominent names from the Turkish and global business world on April 22, 2014.
At the Forum, Borsa İstanbul Chairman and CEO İbrahim M. Turhan talked about the development of the Turkish economy in the last decade, Borsa İstanbul’s collaborations and future targets.
Turkey's opportunities and competitive advantages were shared with high profile participants at the Forum, at which Borsa İstanbul Chairman and CEO İbrahim M. Turhan, NASDAQ OMX Group Vice Chairman Meyer 'Sandy' Frucher, Citi Global Government Affairs Managing Director Charles R. Johnston and BC Partners Managing Director Nikos Stathopoulos delivered speeches. The Forum moderator was İstanbul Financial Center Initiative Chairman Dr. Artunç Kocabalkan.
As in the past years, Borsa İstanbul plans to organize a series of events in and outside of Turkey as part of İstanbul International Financial Center project.
The third “İstanbul: Regional Hub, Global Actor” forum will be held in London on January 20, 2015. Entitled “Turkey: Discover the Potential”, the meeting will be hosted by Borsa İstanbul and the Turkish Exporters Assembly. At the meeting, information on the plans and processes regarding Borsa İstanbul’s public offering after the new strategic partnerships will be provided.
At the meeting, a cooperation agreement between the London Stock Exchange and Borsa İstanbul will be signed. The agreement aims at providing liquidity for the financial derivatives traded on Borsa İstanbul and increasing the depth and efficiency of Borsa İstanbul markets.
Borsa İstanbul as a Financial Supermarket
In order to reach a global size, Borsa İstanbul has been adding new products to its portfolio so that a product range diversified on the basis of yield and risk preferences, and responding to the needs of the investors has been created. In this process, sukuks were listed on Borsa İstanbul for the first time while private sector lease certificates are traded on the Repo Market for Specified Securities. In addition to the products traded on the Collective Products Market, options contracts are traded on the Derivatives Market.
Horizontal and Vertical Integration on Borsa İstanbul
In consideration of the fact that the financing resources required for Turkey to realize her 2023 vision is only possible with strong capital markets and a robust securities exchange, since 2012, Borsa İstanbul has made important steps to add to its competitive power; including updating its legal infrastructure, demutualization, horizontal and vertical integration, widening the product range, strengthening international connections and renewing the technological infrastructure. Primarily, the new Capital Markets Law, which is much more investor and market oriented compared to the former Law as well as the secondary arrangements went into force, which led to the formation of a capital markets environment up to the world standards. Following the merger of İMKB, İstanbul Gold Exchange and Turkish Derivatives Exchange (TURKDEX), the horizontal integration of the sector was completed, concluding the demutualization process.
The New Center of Attraction for Islamic Finance: İstanbul
With regard to Islamic finance, which has recently been growing significantly, the World Bank Global Islamic Finance Development Center was established within Borsa İstanbul premises, to operate with the support of Borsa İstanbul, Turkish Treasury Undersecretariat, Banking Regulation and Supervision Agency, Capital Markets Board of Turkey, and Central Bank of the Republic of Turkey under the leadership of the World Bank. Another initiative on Islamic finance is the cooperation agreement with International Islamic Financial Market (IIFM). The agreement is aimed at making use of IIFM’s experience and knowledge accumulation on Islamic finance in order to add new Islamic finance products to Borsa İstanbul’s product range. Furthermore, OIC-COMCEC 50 Islamic Index, covering 50 large companies from 19 OIC (Islamic Cooperation Organization) member countries was launched within this framework.
Borsa İstanbul will sell technology to 25 countries
On its conversion path to become a global actor, one of the priorities of Borsa İstanbul is creating a world-class technological infrastructure. Within this framework, as a result of the strategic cooperation agreement signed with NASDAQ OMX, Borsa İstanbul will have an infrastructure allowing the trading of more than one asset class in different currencies simultaneously, and full integration with post-trade processes is ensured. With this agreement, all products subject to technology transfer will be transferred to Borsa İstanbul including their source codes. The agreement grants Borsa İstanbul the right to make modifications on the technology to be transferred from Nasdaq and to sell the technology to twenty-five countries in the Euro-Asian region. Consequently, Borsa İstanbul will be able to modify and improve this technology as needed, and to create its own financial technology in the medium term.
New Products and Services related to the new Data Center at Borsa İstanbul
Through many projects, Borsa İstanbul develops new products and services for foreign, institutional and domestic investors in order to create more added value. Within this framework, R&D efforts are accelerated in cooperation with universities while Borsa İstanbul Data Center, which has been launched recently, offers financial services for many institutions.
İstanbul climbs 22 ranks in the Global Financial Centers Index
Aware of the fact its crucial role in positioning İstanbul among the most important regional and global actors of the region within the scope of İstanbul International Financial Center project, Borsa İstanbul continues to work in determination. İstanbul, which ranked 74th in the Global Financial Centers Index (GFCI) as of end-2012, climbed 32 steps up to the 42nd rank in the last three years, as a result of the efforts.
Borsa İstanbul invests in energy, the sector of the future
Energy is among the sectors that will be invested in the most in the future. Borsa İstanbul became a partner of Enerji Piyasaları İşletme A.Ş., established as a spot electricity market operator, and the preliminary studies for trading energy based derivatives products on Borsa İstanbul have been completed.
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