- Authorities channeled billions of liras into stock market
- Strong bids left “unexecuted” at limit up on Wednesday
According to Bloomberg article published on February 16, 2023, Turkish equities have reversed their post-quakes losses in a little more than a day, less than the amount of time it took for the big slump to occur, thanks to government measures to support its stock market.
The benchmark Borsa Istanbul 100 Index rose as much as 7.5% before trading 6.2% higher as of 10:29 a.m. in Istanbul on Thursday, climbing to its highest level since Jan. 26. The index extended its two-day gains to 17%, the biggest such rally since 2002. It was also about 17% above its Feb. 7 low.
The rebound came after authorities showed their determination to reverse the rout that erased tens of billions of dollar from the market value of Turkish companies in the two days of trades that followed the Feb. 6 earthquakes. Among the measures with the most expected impact were the Turkish government’s channeling of billions of liras from pension funds and state lenders into the stock market, and encouraging buybacks.
Istanbul-based Global Securities said a sharply higher start for BIST was anticipated, “given the strong bids that were left unexecuted at the limit-up prices on Wednesday.”
The New York-traded iShares MSCI Türkiye ETF, the largest exchange-traded fund tracking Turkish stocks, climbed 9.6% on Wednesday, extending its gains and cueing for the rally’s continuation.
However, veteran emerging-markets investor Mark Mobius sounded a note of caution yesterday, saying Türkiye’s efforts to prop up stocks as they reopen following the earthquake-fueled rout could have the “opposite” impact.
“We can understand the government’s desire to limit the impact of the disaster on the market as a whole,” Mobius said by email in response to Bloomberg’s questions. “However, such interventions often have an impact opposite from what is intended.” He still has a longterm positive outlook on the country’s stocks.
