Barış ERKAYA / EXCHANGE ANALYSIS
The information that foreign investors have been making net purchases in Borsa Istanbul for two weeks was reflected in the statistics. For the size of the net purchase, it seems to have reached $358 million in two weeks. However, in our previous analyzes, we mentioned that foreign investors can turn the balance sheet period into an opportunity. When the depth of the purchases is delved a little bit, it is clearly seen that the purchases are realized in stocks with high balance sheet expectations. In this case, the first question to be asked is: Is the foreign investor really making a permanent return to Borsa Istanbul, or are they here to make purchases at a level that will increase the index and shares, as we have seen many examples in the past, and sell more at higher levels. Let’s clarify with a shorter sentence: Are the foreign transactions we have seen in the stock market in the last two weeks, are those of foreign traders or long-term foreigners? Let’s not get the result that we are looking for a piece of lice under every positive development. But Borsa İstanbul’s history is full of dozens of such examples. We have enough evidence to be skeptical of foreign purchases in Borsa Istanbul that started during the balance sheet periods during the periods when the foreign share has been on the decline for a long time and reached to unprecedented low levels in its history. For example, even in the 2018-2022 period, when the share of foreigners in the stock market started to decline from its peak, we can count at least 6 examples where foreigners occasionally appear in purchases, giving the impression that they have returned. And almost all of them coincide with the balance sheet periods. The bottom turn scams of foreigners, which started on July 23, 2018, May 13, 2019, December 16, 2019, July 20, 2020, October 9, 2020, October 28, 2021, ended with much more foreign sales after short-lived rallies. . In order not to experience the same frustration, it is necessary to evaluate the issue logically. And of course a little patience…
DREAM SCENARIO FOR THE EXCHANGE
Now maybe we should start with the following: What is the reason for foreign investors to return to Borsa Istanbul? There are many. Borsa İstanbul is one of the cheapest stock exchanges in the world. Both valuation ratios and dollar In terms of index levels, this is a fact that is not even open to discussion. So, do foreign investors have enough appetite to make permanent investments in a developing country like Turkey, which has seen a reduction in its credit rating in the recent past, whose local currency has lost serious strength and whose inflation is rapidly increasing?
Normally, the answer to this question should be “no”. However, global developments have actually placed international investors in a very serious low-yield grip. Funds investing in emerging markets have long been far from delivering the high returns they promised investors, especially. It is only a matter of time now that the Fed may start to take monetary tightening more slowly, and the risk appetite of foreign investors will increase at a time when the dollar may begin to lose its international strength. However, no foreign investor will invest in a country with the risks we have listed in the previous paragraph, unless all of these have the potential to change. So let’s ask the other way around. Is there any possibility of all this to be reversed in Turkey? According to some, the elections include such a scenario. As it is known that foreign investors are active during election periods. In this case, yes, there is a possibility that foreign investors will return for long-term investment if they see a strong anchor, despite all the risks. We have seen this many times before in Borsa Istanbul. Because such periods can be periods when the potential of return outweighs in the evaluations of high risks/high return potential. Since the promise of return is incomparably high compared to Borsa Istanbul’s peers? In other words, such a scenario is not an impossible scenario.
So let’s dig a little deeper into the signals that strangers have been giving out over the last two weeks and look for permanent signals. Foreign investors netted more than $300 million in two weeks. But what stocks did he do? To make this a little more secure, let’s include corporate funds.
SHARES RETURNED FROM SALE
It is seen that some of the shares, which foreign investors have been selling since the beginning of the year, turned into purchases in August. The total weight of these shares on the index is 39 percent. According to our analysis of the swaps, Tofaş Automotive Factories comes first among these shares. The share of foreign investors and corporate funds in the clearing of this stock increased from 49.67 percent to 58.39 percent. There is an 8.7 percent increase in barter dominance. So how much did TOASO’s share price increase in August? 14 percent. The financial performance of the company, especially the announcement that Fiat Doblo, which is produced in Turkey, will shift its production to Spain, the company’s profit in dollar terms, and the increase of 7 percent in the six-month balance sheet compared to the previous year limited the rise in the share.
Another on the list automotive company is Ford Otosan. The share of foreign investors and corporate funds in the share swap increased from 63.74 percent to 67.73 percent. So there is a 4 percent increase in exchange dominance. Shares of the company rose 10 percent in August. The company’s net profit increased by 22 percent in dollar terms.
Everyone who watched the session clearly expressed that foreign purchases came to banks in the last rise. Akbank is at the forefront of these shares. The clearing share of foreigners and corporate funds increased from 56.26 percent to 61.34 percent. Exchange dominance increase of 5%. This increase was accompanied by a 30 percent increase in share price. The dollar-based change in the bank’s profits is 171 percent. THY is one of the most striking companies on the list. A 4 percent increase in foreign exchange dominance resulted in a 34 percent increase in share price. In the period when the company went from loss to profit, the increase in its profit was over 10 thousand percent. Apart from these, other companies that foreigners sell throughout the year but turn to buy in August include holdings such as Sabancı Holding, Şişecam, banks such as Garanti Bank and Yapı Kredi Bank, TAV Airports, Pegasus. tourism focused companies, and cheap markets such as Şok and BİM draw attention.
WHAT INSTITUTIONS CONTINUE TO BUY
ODAŞ is the first to stand out among the companies that saw an increase in the exchange of foreign and corporate funds from the end of July to the 17th of August. The share of these institutions in the company’s clearing increased from 13 percent to 19 percent. The share price of the company, which achieved a 382 percent profit increase in dollar terms, increased by 17 percent in August. Alarko Holding, Torunlar GYO, Gen Pharmaceuticals, Kızılbuk GYO, Ziraat GYO, Oyak Cement and Nurol GYO are other companies that foreigners and corporate funds continued to purchase in August. When we look at the shares that foreigners have been buying since the beginning of the year, but turned to sale in August, stocks such as Hektaş, Penta Bilgisayar, Şekerbank, Kerevitaş, Başkentgaz, Fonet, Global Investment Holding, Aygaz, Selçuk Ecza Deposu, Matriks, DoCo, Anadolu Group Holding draw attention. In companies that foreigners have sold since the beginning of the year and continued to sell in August, the knot seems to be unraveling a bit. Tekfen, Tüpraş, Koç Holding, Arçelik, Ereğli Demir Çelik, Blue Clothing, Medical Park, Turkcell, SaSa, Ülker, Kardemir D, Koza Anadolu, Aksa, Koza Gold companies like this list.
Confusing LOOK IN FOREIGN EXCHANGE
In the light of the data, the first view is that while foreign purchases (thanks to the index weight of 39 percent) in companies with a high weight on the index and whose profits have increased rapidly, pull the stock market up altogether, they are trying to sell stocks with a weight of 31 percent in the index without looking at the foreign balance sheet performance without facing serious selling pressure from the rising level. continued. In other words, we do not see a total entry in the purchases of foreigners. One of the general characteristics of long-term foreigners’ cheap return to the market is their wholesale purchase of index stocks regardless of their level. In this respect, the first indicator is that foreigners have increased the index with selective purchases, but they have continued their sales in some of the shares they have for months, regardless of the profit or the low price. Let us remind you of a claim that is frequently voiced in the market: Saudi Arabia. exchange There are allegations that his funds are entering the banks. It is impossible to distinguish it. Because whether it is European-American funds or Arab funds, if foreigners come, they will always appear on foreign exchanges of institutions such as Citibank, Deutschebank, Bank of America. However, in order to abandon the cautious view as to whether these foreign purchases are permanent and sincere purchases, it is necessary to see that these purchases continue after the balance sheets. This is something we will test in a few weeks. Otherwise, it will be nothing but a classic cycle in which foreign investors drive prices up and sell more than they buy. It is useful to keep aside the possibility of seeing European, American and Japanese origin foreign funds that will blow the stock market in the end of 2022 or in the first quarter of 2023, with the election scenario.
