In Borsa Istanbul, which has risen for 8 weeks in a row, the decline that started small as of the beginning of the year and exceeded 7 percent the previous day surprised approximately 2 million small investors who have been stock investors in the last 2 years. However, the investor Borsa İstanbul, who has been in the stock market for a long time, knew that he had been experiencing the same turbulence many times until now. The stock market, which entered the year from 5 thousand 694 points, went down to 4 thousand 961 points. So 13 percent crashed. The 7 percent decrease in the previous day attracted particular attention. So what drove the stock market down?
RISE EXPECTED UNTIL THE LAST 1 MONTH
First of all, let’s remember that the general expectation in the stock market was that the stocks would gain value until the election was a while. Turbulence expectation was for the last 1 month. However, both the trustee rumors against the Istanbul Metropolitan Municipality and the Constitutional Court’s decision regarding the HDP worried the investors, as they caused fear of political and economic instability. The announcement that the election date will be brought forward also confused the investor.
SHARE REPO BAN TAKES 8 BILLION LIRA
The second reason is a bit technical. Some brokerage houses were giving loans to investors who had stocks as collateral. The Capital Markets Board (CMB) has banned this share repo. On the day of this ban, the stock market showed its first decline. Seeing this, the CMB extended the ban until the end of this month. However, individuals and institutions began to terminate the share repo, albeit slowly. Experts say that approximately 8 billion liras of loans were withdrawn from the market with this decision.
COMMON SELLING THE CAKE IS SHALLING
One of the issues that most negatively affected the index are new public offerings and joint sales. Not a week goes by that 2-3 new public offerings. Companies are trying to find resources from the capital markets in an environment where it is difficult to find loans. Investors, on the other hand, sell their current shares in the stock market and buy from these shares, with the expectation of an increase in the newly publicized shares. Company partners are also selling to take advantage of rising shares. This shrinks the cake.
NEW RESIDENTS CANNOT BECOME STOCK EXCHANGE YET
While these developments were taking place, the investor, who made sufficient profits, preferred to slip his profit into his pocket after a few days of small declines. One of the most important reasons for the deepening of the tremor is that the new residents of the stock market panic and sell after the small declines. Investors from markets such as crypto, many of which are young and fast-trading, buy and sell very quickly. As a matter of fact, this investor behavior was also effective in the 4.4 percent increase in the stock market yesterday afternoon.
THE FACTORS THAT ACHIEVED THE RISE STILL APPLY
Despite these negativities, the factors that enabled the stock market to rise 187 percent last year and 73 percent since September are still valid. For this reason, many investors think that the stock market will still rise and continue to buy. At the forefront of these factors is the low interest rate and exchange rate policy. Due to the 20 percent deposit interest rate against inflation, which exceeded 84 percent last month, and the foreign exchange that has been stable for a long time, it cannot find a means of protection against inflation. Global markets and commodity prices such as gold cannot be a solution to the problem of the investor. Finally, high profits expected from companies benefiting from high inflation still keep these stocks in the spotlight.