Sebnem TURHAN
The search for a solution to the movements that shook Borsa Istanbul has come to an end, with the sharp decline that started in the stock market due to the high leveraged positions of some institutions in banking stocks in futures transactions. Regulators since last week, economy After the meetings held by the management, brokerage houses and unions, it was decided to transfer the contracts of the brokerage houses on the futures options exchange to the spot market with a special operation. Thus, while the brokerage houses and certain shares in distress are expected to be resolved, the brokerage houses will not be able to dispose of the shares they have turned into spotlights.
Exchange Istanbul made a premium of more than 150 percent in banking shares since mid-July with the leveraged positions taken by some brokerage houses and investors, but the collateral calls coming with the effect of the sharp decline in the shares dragged the stock market and the shares into a great collapse. As of September 12, the rapidly increasing margin calls increased to 1.8 billion liras per day, especially the three-day margin call in the previous week approached 5 billion liras. Afterwards, Takasbank made an adjustment in the collateral ratios, and then, since last week, a decrease was observed in the collateral replenishment calls. This week, it decreased to 363.5 million liras.
While the positions taken in the shares of Halkbank, Vakıfbank, İş REIT, Şekerbank and TSKB in the transactions made in VIOP in Borsa Istanbul attracted attention, economy management and regulators, especially the Capital Markets Board, started to seek a solution to the problem since the beginning of the last week. Although two public bank stocks started to recover from the bottom up with the purchases made by a large publicly funded buyer and Halkbank within the framework of the buyback program during the week, the bottom-up movement continued every day in the other three stocks. According to the information obtained from the sources close to the subject, while the regulators and the economy management called some big intermediary institutions and asked them to ‘support the stock market’, the weekend was spent with intense meetings.
Meetings held throughout the week
In the first meetings, while the intermediary institutions offered cash settlement, it was pointed out that if the cash settlement is brought forward in the market, arbitrage funds and those who price share options in their treasury will face great losses. While the cash settlement proposal remained in the background, in the recent meetings, it has come to the fore that futures contracts in VIOP should be replaced by a special operation. According to the information obtained from sources close to the subject, futures contracts will be placed on the spot before the expiry date and intermediary institutions will have to carry these positions. After intense bargaining, intermediary institutions are rescued from futures transactions, while the condition of carrying the burden in the spot market is again considered problematic. However, according to the information given by the sources, these positions must be cleaned in order to maintain the healthy functioning of the system.
Where was the source sourced when converting to spot?
According to the information obtained from sources close to the subject, this operation is carried out to save institutions. Sources stated that speculators that traded during the uptrend period most likely went bankrupt and were wiped out of the market. According to the information given by the sources, it is not clear how much the institutions will carry the load on the spot. Pointing out that it is important from where the intermediary institutions get the money needed to put the forward positions on the spot, the sources said that it is not clear whether credit was used or money was transferred from other companies. The sources noted that if these positions are carried on the spot with credit, there is a possibility that intermediary institutions will turn it into sales at some point, and emphasized that this situation will look like the sword of Damocles for the market and again carries a risk for the market. On the other hand, there is talk of intermediary institutions’ guarantee fund at Takasbank. Sources close to the subject, who stated that even if the spot market passes, still needs resources to save 4 brokerage houses, emphasized that a change is needed in order to make transactions more visible in VIOP and to inform the brokerage houses of the burden carried. While the regulator gives priority to the solution of the problem, it is also among the information given by the sources that new regulations will be introduced later.