Institutional investors can now use buy-side crossing network Liquidnet to trade Turkish stocks, following the platform’s connection via a local broker to the Istanbul Stock Exchange (ISE).
Turkey is currently the seventh largest economy in Europe, with 1,000 companies listed on the ISE and a total domestic market capitalisation of €214.86 billion. The Turkish government has been reforming its trading infrastructure and capital markets law to keep pace with international investor demand; the ISE channelled €422 billion in new capital through IPOs last year, while Turkey’s credit rating was upgraded in June this year to one step below investment grade by Moody’s Investors Service, which cited the country’s improving fiscal conditions as its primary impetus.
“The Turkish economy has shown strong signs of growth despite global macro volatility, capturing the interest of portfolio managers globally,” said Per Loven, head of corporate strategy for Liquidnet Europe. “As Turkey continues on its path to becoming a regional financial powerhouse, institutional investors looking to unlock value in Turkish growth companies will now be able to source large-scale liquidity in those equities, with minimal market impact, through our trading network.”
Turkey is the 40th market offered by Liquidnet for trading and follows the recent addition of Indonesian and Malaysian markets.
As part of the country’s modernisation efforts, which have included adopting the same legal definitions of financial instruments and capital market concepts as set out in Europe’s MiFID, a rule change that allowed order cancellation on the ISE since late in 2010 has acted as a catalyst for growth in algorithmic trading strategies.
Last month, Citi launched a suite of algorithmic and direct market access trading products designed for the Turkish market, citing high demand for access to the market from buy-side clients. Citi used its broking subsidiary Citi Menkul to channel the new products onto the ISE.
“Turkish equities are attractive from an investment perspective, and the addition of a new market to Liquidnet is welcomes as the ability to trade Turkish equities anonymously, in block size, is a favourable solution,” said Mandy Pike, global head of equity dealing at Aberdeen Asset Management.