Is the fairy tale in the stock market turning into a nightmare?

Strange developments are taking place in Borsa Istanbul. In the middle of last month, a wild climb started, led by the shares of public banks Vakıfbank and Halkbank. The uptrend continued this month as well. The rise in Vakıfbank shares reached 220 percent as of yesterday morning, and 196 percent in Halkbank. Such a return does not exist even in cryptocurrencies. There is gambling, after all.

Yesterday evening, the stock market crashed with hard sales. When the decrease exceeded 5 percent, the operations were stopped with the circuit breaker. We will see today whether the fairy tale in the stock market will continue from where it left off or will it turn into a nightmare. However, what happened is very strange.

One of the most striking aspects of the fairy tale was that many of the giant industrial companies in the stock market did not participate in the rise. As of yesterday morning, the monthly increase in Erdemir Ereğli, one of the companies that can be defined as the backbone of the Turkish economy, was limited to 19 percent, 17 percent in Şişecam, 15 percent in Tofaş and 13 percent in Arçelik. These are not bad returns either, but next to the 200 percent in public banks, it is not worth mentioning.

Yes, in the second quarter, the banking sector’sâThere were large increases in But the rise in Vakıfbank and Halkbank shares is too high to be explained by this.

The exchange information showing through which intermediary institutions the shares of public banks are purchased reveals an interesting fact: The majority of these shares are in the banks’ own intermediary institutions.

Which brokerage houses are Halkbank shares in?

In which brokerage houses are Vakıfbank shares?

True, anyone can trade shares through public brokerage firms. However, if citizens or institutional investors would buy the shares of public banks, why would they only use the intermediary institutions of public banks?

Then?

Economist Artunç Kocabalkan recently shared an interesting Tweet: “New KKM has been discovered: BIST.” KKM, as you know, means exchange-protected deposits. BIST is Borsa Istanbul.

Currency-protected deposits were put into practice last December, when the dollar went to 18.40 TL. The aim was to stop the dollar rush of savers trying to protect themselves from inflation. KKM was really effective for a while, those with money preferred KKM instead of foreign currency and gold.

But KKM’s limit has been reached. It was necessary to pull a new rabbit out of the hat in order to prevent the citizens from switching to dollars and gold and to keep them in the Turkish lira.

It turns out that the new rabbit in the hat is the stock market. The calculation is simple: buy the shares of public banks instead of dollars, earn 200 percent.

Minister of Treasury and Finance Nurettin Nabati last weekend “The stock market is getting more attractive every day” said. He continued: BIST 100 index has been breaking records for 2 months. So much so that this rise marks the strongest rally since July 2005. The increasing production and employment capacity of our economy lies behind the rise in our stock market.”

If the increase in production and employment were the basis of the rise in the stock market, as Nabati said, wouldn’t the shares of industrial companies also break records? As we see, this is not the case.

This isn’t Nabati’s only assessment of the stock market. He also said last week: Our stock market is positively differentiated from other developing country stock markets with its recent performance. We expect this strong trend to continue in the coming period.”

What if the ascension doesn’t last? What will happen to those who trust the Minister and invest their money in the stock market?

Every ascent has a down. Those who get on the stock market from the last wagon should also calculate that the banking shares will fall as they come out.

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