FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
ISTANBUL STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Economic and Political Environment
Following a comprehensive economic program
with the strong backing of a single party
majority government for about four years,
Turkey has had significant achievements both
on EU convergence and economic
restructuring. Succesful implementation of the
IMF-supported economic stabilization program
produced impressive results on Turkey’s
macroeconomic performance and strengthened
the developments on key legislations pertaining
to social security, banking sector and tax
administration.
Robust economic growth has been achieved
with 8% on average during the last four years.
Despite strong growth, inflation has come down
to around 8% from around 70% in four years
time. With strong fiscal policy net public debt to
GNP ratio declined to 55.8% at the end of 2005
from 90.5% in 2001.
Following a very busy privatization period in
2005, tenders of state owned enterprises
including Turk Telecom, Tupras (Oil Refinery)
and Erdemir (Iron and Steel Company) resulted
with US$ 6.55 billion, US$ 4.14 billion and
US$ 2.77 billion proceeds, respectively.
The Privatization Administration held a number
of successful tenders in the first half of 2006.
The tender for the privatization of Erdemir,
Turkey’s largest iron and steel producing entity
was concluded on October 4, 2005 and the
bidder proposed to pay USD 2.77 billion for
46.12% of Erdemir’s shares. Sale agreement
was signed on February 27, 2006.
Economic Performance
GDP and GNP grew by 6.4% and 6.3%,
respectively in the first quarter of 2006.
In 2005, the Turkish economy grew by 7.6%.
The strong growth is mainly attributable to the
construction sector which grew by 25.9%.
On the expenditures side, private sector
consumption and investment expenditures
made the highest contribution to growth by 7%
and 8%, respectively.
By the end of June 2006, exports and imports
reached US$ 39.5 billion and US$ 65.2 billion,
respectively, exports registering an increase of
11.5% and imports registering an increase of
18.3% compared to the January-June period of
2005. Accordingly, the rate of imports covered
by exports stood at 60.5%.
The year-on-year consumer price index
increased to 10.12% as of end June 2006, from
8.95% as of end June 2005. The year-on-year
producer price index increased to 12.52% as of
end June 2006, from 4.25% as of end June
2005.
The consolidated budget registered a surplus of
YTL 2.1 billion in June 2006 bringing the year to
date primary surplus to YTL 4.9 billion. Total
revenue increased by 36.63% to YTL 84 billion
and expenditures increased by 24.8%
to YTL 81.6 billion in the first half of 2006
compared to the same period of 2005. Thus,
the consolidated budget surplus is realized as
YTL 2.4 billion, while the consolidated budget
deficit was YTL 3.9 billion in the same period in
2005.
As of the end of June 2006, the ISE-National
100 Index, the main stock market index on
the ISE increased by 11.7% in US$ terms
compared to June 2005. The main stock market
indicator ISE National-100 Index increased to a
level of 1,325.23 on US$ basis at the end of
June 2006 from 1,177 at the end of June 2005.
The stock market total traded value in the first
half of 2006 increased to US$ 137.9 billion by
52.1% over the same period of 2005. The
average daily traded value stood at US$ 1.112
million at end-June 2006.
The market capitalization of 316 ISE traded
companies increased to a level of US$ 128.3
billion at end-June 2006 compared to
US$ 106.1 billion at end-June 2005.
Three Exchange Traded Funds are traded on
the ISE as of end June 2006.
The net equity investment in Turkey by foreign
portfolio investors has been registered at
around US$ 26.4 billion as of end-June 2006
representing 65% of the free float of stock
market.
The turnover in public debt securities
transacted on the Outright Purchases and Sales
Market, decreased by 23% in US$ terms to
US$ 154.8 billion in January-June period of
2006, compared to the same period of 2005.
The Repo/Reverse Repo Market turnover
increased by 141.3% to US$ 885.2 billion in the
same period. The average daily traded value in
the Outright Purchases and Sales Market and
the Repo/Reverse Repo Market stood at US$
8.3 billion as of end-June 2006.
During the second quarter of 2006, ten
companies “Vestel Beyaz Eflya San. ve Tic. A.fi.”.
(a manufacturing company), “Selçuk Ecza
Deposu Ticaret ve Sanayi A.fi.” (a wholesale
trade company), “Asya Kat›l›m Bankas› A.fi.”
(a bank), “Coca Cola ‹çecek A.fi.” (a beverage
company), “Baflkent Menkul K›ymetler Yat›r›m
Ortakl›¤›” (an investment trust), Metro Menkul
K›ymetler Yat›r›m Ortakl›¤›” (an investment trust),
“Taksim Yat›r›m Ortakl›¤› A.fi.” (an investment
trust), “Euro Menkul K›ymetler Yat›r›m Ortakl›¤›
A.fi.” (an investment trust) offered their stocks
for the first time to public and started to be
traded on the ISE National Market. “Silverline
Endüstri ve Ticaret A.fi.” (a consumer trade
company) and “Armada Bilgisayar Sistemleri
Sanayi ve Ticaret A.fi.” (an information
technology company) offered their stocks for
the first time to public and started to be traded
on the ISE Second National Market and the
ISE New Economy Market, respectively.
The amount of funds raised by the IPOs of ten
companies was US$ 855.4 million.*
* Istanbul Stock Exchange
Key Information Contacts
Capital Markets Board of Turkey www.cmb.gov.tr
The Association of Capital Market Intermediary Institutions of Turkey www.tspakb.org.tr
ISE Settlement and Custody Bank Inc.(Takasbank) www.takasbank.com.tr
Central Registry Agency Inc. of Turkey www.mkk.com.tr
The Turkish Derivatives Exchange (TurkDEX) www.turkdex.org.tr
2003-ORIGINS OF GROSS DOMESTIC PRODUCT (%)
2003-COMPONENTS OF GROSS DOMESTIC PRODUCT (%) (a)
Services
Industry (excl construction)
Agriculture, forestry & fishing
Construction
26.8
57.9
11.8
3.5
PAGE 82
Private consumption
Government consumption
Fixed investment
Stockbuilding
Exports of goods & services
Imports of goods & services
70
60
50
40
30
20
10
0
-10
-20
-30
-40
66.6
27.4
13.6
15.5
7.3
-30.7