The foreigner turned fast, will the stock market rally last?

While foreign investors have been selling continuously since December 2021, they returned to buying for the first time last August. Transactions were mainly for bank shares. So, are foreigners permanent?

Inflation and growth concerns are prominent in the markets on a global basis. Investors are seeking to hedge against inflation. Alternative instruments are being considered as an option. The stock market index rose to 3,521. The index has risen 26 percent in the last month and 89 percent since the beginning of the year. The USD/TL rate is at the level of 18.22. Euro/TL is 18.35 and an ounce of gold is 1,716 dollars. While there is a more horizontal outlook in alternative markets, the index is rising with bank shares. Bank shares have increased by 186% since the beginning of the year.

Interest in stocks increased as the interest rate decreased from 14 points to 13 points in Turkey. While foreigners have been selling continuously since December 2021, purchases came in last August for the first time in eight months. While there are two banks among the five shares they buy the most, the five shares they sell the most are industry and services.

The five shares that foreigners bought the most in August are: Akbank, Tüpraş, THY, Sabancı Holding and Yapı Kredi Bank. The top five shares with the highest sales were Turkcell, Şişe Cam, Ereğli Demir Çelik, Aksa and İş GMYO.

Who buys the most?

Looking at the portfolio values ​​on the basis of the first five countries in Borsa Istanbul, as of September 9, the USA, Qatar, United Kingdom, Luxembourg and the Netherlands stand out as the countries with the highest portfolio value.

The portfolio value of US-based investors increased from TL 121 billion to TL 158 billion in the July-August period. The increase was 36 billion liras. The portfolio value of Qatar-based investors increased from TL 59 billion to TL 68 billion. 8 billion pounds increased. The portfolio value of UK-based investors increased from TL 121 billion to TL 158 billion. There was an increase of 11.7 billion liras. The portfolio value of Netherlands-based investors increased from TL 9.3 billion to TL 10.2 billion.

Will it be permanent?

In developing countries such as Turkey, changes are observed in foreigners’ positions depending on the fluctuations in country credit ratings and credit risk premiums. Foreigners who reduce their current positions or put them on hold when the risk rises can be effective in the direction of the market depending on their transaction intensity.

When the pass-through between instruments in the stock, foreign exchange and interest equation is followed, it is observed that developing countries are trying to attract investors by incurring too much costs. The biggest reason for this is that developing countries give less confidence to investors in the international monetary cycle. Foreign funds are, after all, making profit-oriented transactions. As such, there are more short-term inflows to countries with low credit ratings and high risk premiums. Such transactions lead to increased fluctuations in the markets.

The course of the foreign share

While the foreign share was 32.71 on 3 August, it became 35.06 on 26 August. Foreign share fell to 33.58 on 8 September. The share of foreigners has decreased by 1.54 basis points since August.

As the election process is approached, an increase can be seen in the ‘buy-sell’ of foreigners. Stock market in Turkey is at the bottom in dollar terms. Although the BIST 100 Index broke the record with 3,521 in TL terms, it stands at 192.9 in dollar terms. The index rose to the level of 500 in 2013 in dollar terms.

Transactions since the beginning of the year

When foreign transactions are followed since the beginning of the year, we see that sales are dominant. Since the beginning of the year, foreigners have sold 2.4 billion liras in total. They had sales of $267 million in January, $216 million in February, and $506 million in March. They went on sale in April with $246 million. By May, sales had increased and had grown to $885 million. Foreign sales remained high in June and amounted to 749 million dollars. By July, sales were at $247 million. In August, purchases stood out for the first time, with a net purchase of $694 million.

The foreigner turned fast, will the stock market rally last?

How to make big money in the stock market?

1 In the stock market, big money is earned by saving.

2 Instead of sudden big gains, it should move forward with firm steps.

3 Investments should be made with portfolios to be created from dividend and growth stocks, targeting a period of 5 or 10 years.

4 Purchases should be made gradually, not all at once. Some of the money should be reserved and cash should be kept in case of unexpected developments. 8, 20, 50, 100, 200 and 400 day averages can be followed for the stock purchased. If 400-day averages are reached, there are extraordinary developments. Cash set aside for pickups on dips can be used. 100, 200-day averages are long-term averages. These are the times when the shares are multiplied. Stocks continue their short-term trends as long as they are above the 8-day average.

5 Leading companies in the sector, whose sales and profits are growing and investing, earn their investors in the long run.

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