President of AKP Recep Tayyip ErdoganIt is expected that this issue will be discussed at the meeting chaired by .
Market participants and experts stated that possible regulatory changes include reducing the number of futures contracts.
While the sources estimated that many investors, both large and small, suffered losses due to the positions opened in the 150 percent rise that continued for almost two months and the following 10-day decline period, he stated that this situation also caused discomfort in the government.
A senior economics official said,Developments in bank shares have both economic and political effects… It is absolutely necessary to prevent similar movements from happening. Alternative steps are being considered. Which steps to take will be decided shortly.” said.
A brokerage house manager, who did not want his name to be disclosed, stated that the sharp price movements created by leveraged positions in large stocks such as banks with high transaction volume caused discomfort in the economy management and that a regulation change could be made under the coordination of the Treasury, which would make it difficult for this to happen again.
The same source said, “There has been a sensitivity here, especially due to the volatility in liquid bank stocks.
Market experts pointed out that if the collateral deficit cannot be covered by investors, it may be reflected in the balance sheet of the brokerage house.
Some experts also stated that a step could be taken to restrict futures contracts based on the shares of small-medium-sized companies that have low trading volume and allow price manipulation.
The Treasury and Borsa Istanbul directed Reuters’ question about whether any steps would be taken to the regulatory authorities. However, there was no response from the Capital Markets Board (CMB) at the time of writing the news.
DAMAGE IS NOT CLEAR, JAM CONTINUES
After the climb and fall, which some investors described as the “first major crisis” of the Futures and Options Market (VIOP), sharp movements stopped this week.
Turkey’s largest bank shares, after falling to the bottom consecutively last week, went sideways this week, showing that the overall stress in the market has decreased.
However, the uninterrupted grassroots movement in Şekerbank, TSKB and İş REIT shares since last week showed that the stress did not end in some parts of the market. Şekerbank shares became the bottom for the seventh day in a row, and TSKB and İş REIT for the sixth consecutive day.
While a source stated that the positions in the futures market are predominantly held by investors trading from five brokerage houses, he stated that if the collateral required for these positions is not completed by the investors, it may be reflected in the balance sheet of the brokerage house.
Stating that the investors holding positions requiring margin completion traded from Ahlatçı, Alnus, Gedik, Tacirler and Trive Yatırım, two traders stated that the tightness and the collateral problem would not be resolved until the base movement in these three stocks was over.
Although the margin call, which was close to the record of 1.8 billion liras last week, with 1.4 billion liras at the beginning of the week, has decreased in recent days, but as of yesterday, it remained high with 567 million liras.
To continue to hold leveraged positions, investors must fill their margin gaps by showing cash, shares or other securities equal to the margin call.
If this is not possible, brokerage houses complete the collateral by selling the shares held by the investors. If these sales, which cause decreases in the spot share market, are insufficient, the brokerage houses should fill the gap with their own funds, and if this is insufficient, the guarantee fund in Takasbank should be used.
Takasbank relieved the market by lowering the minimum collateral limits at the beginning of the week. Although it will be enough to cover all the potential losses in the Takasbank guarantee fund, whose size is 1.2 billion TL, it is possible that the possible losses will be reflected in the balance sheet of the intermediary institutions.
Gedik Investment answered Reuters’ questions on the subject, “We cannot comment on the volatility in the markets. Our confidence in the capital markets of our country continues today as it was yesterday. We continue our operations in the same way.”
Alnus Investment did not respond to questions, but a source close to the company stated that there is sufficient collateral, some of which is shares.
There was no response from Ahlatçı, Trive and Tacirler Yatırım at the time of writing.
POSSIBLE MEASURES
Share-based futures contracts of a total of 49 companies are open in VIOP. While three maturities are continuously traded for each share-based contract, the contracts are completed when the shares physically change hands at the end of the term.
Deriva Consulting Managing Partner Tolga Uysal, who took part in the establishment of the futures markets, which later turned into VIOP, in 2005, stated that the squeeze in the market was mainly due to the necessity of physical reconciliation of the futures contracts, which expire on September 30, and said, “In order to avoid this crisis again, Futures transactions should not be opened in shallow stocks,” he said.
Uysal stated that if the base movement in Şekerbank, TSKB and İş REIT shares continues until September 30, the tightness caused by physical delivery can be solved by a cash settlement, that is, by clearing the price difference between the buyer and the seller, and that this situation will result in losses in corporate funds that open arbitrage positions in VIOP. pointed out that he could create
Summarizing the problem in the market by saying, “The problem here is the vicious cycle caused by the losses caused by the margin call in shallow shares in the spot market, and the congestion created by the physical compromise condition. Investors who take long positions will have to find these shares at the end of the maturity period,” Uysal said. He stated that he may face losses, but if the intermediary institutions form a gradual collateral pool in Takasbank, it will be sufficient to cover the losses.