The strong increase in bank shares, which has caused a stir on the stock exchange since the beginning of August, is becoming clear. Foreign transactions, foreign holding ratios and capital movements released by the BIST in August show that bank stocks were mainly bought by foreigners.
➔Certainly When these purchases lasted three weeks and triggered a serious price move, locals stepped in. Foreigners, on the other hand, went on sale this time. Net purchases by foreigners that lasted three weeks turned into net sales in the last two weeks.
➔Foreign purchases were a net $724 million in the first three weeks of August. For the fourth week ended August 26, they had net sales of $32 million.
➔The percentage of foreigners dropped to 32.71 percent on August 3rd and was back to the pre-1997 level. As early as 1989, the Turkish capital markets were opened to foreign investors.
➔ After rising to 35.11 percent on August 25, foreign stocks fell to 33.67 percent by September 7.
FOREIGNERS ALSO BEAT MAN, BUYER
➔According to the BIST Foreigners made net purchases of $694 million in August. Of that, $274 million, or 40 percent, was in bank stocks.
➔Short Recently, $274 million in net purchases was enough to blow up the stock market.
➔In the past, the joint action of several big players caused big waves on the stock exchange. Now the situation is different, but there is no resemblance. It just seems like the crowd has increased a bit.
➔These purchases can be real foreigners as seen officially, or a domestic mustache investor wearing a foreign mask.
➔Certainly Notably, it is more of a short-term investment than a domestic or foreign identity.
➔The time it takes for foreigners to invest in the Turkish market has already shortened.
➔While the average length of time foreigners have invested in banks fell to 74 days in 2020, it was 47 days in 2021. The term for locals to invest in banks is 18 days in 2020 and 27 days in 2021.
➔For the entire stock market between 2012-2018 The average investment term of foreigners in 6 years was 276 days or 9.2 months. From here there is a term of 1.5 months, and the wind blows in the place of the exchange’s old institutional foreign investors.
➔Remaining or incoming foreign investors may describe this as very short-term, hit-and-run. While the average maturity for foreign investors fell to 45 days in 2021, it was 27 days for domestic investors.
THE PRICE OF PERSECUTING A FOREIGN IS HEAVY
➔The lesson is that it has become very risky to watch foreigners, as it was in the 1990s, 2000s and 2010s. It is now expensive for locals to chase after foreigners.
➔Because it makes little difference whether the foreigner does business on behalf of the foreigner, whether the native mustache wears a mask or whether the foreigner actually does it. They are also gamblers and short-term traders like the locals.
➔A big part of this was that credit ratings fell 4-5 notches below investment grade and foreign portfolio investment began to be despised.
➔Foreigners on the stock exchange generated net sales of $10 billion in the period from the second half of 2018 to July. when I write this Minister Nureddin Nabati announced that foreigners buy. it was true
➔However, these purchases were limited to just three weeks of August and totaled $724 million. Like this The 4-year net outflow decreased from $10 billion to a total of $9.3 billion.
215 PERCENT BONUS IN ONE YEAR
August’s net buying ended the foreigners’ net selling streak that started in December last year, lasted 8 months and reached $4 billion 156 million.
➔ 5 of the 10 stocks that foreigners bought the most online in August are bank stocks. ➔There is no bank in the 10 stocks they sell the most.
➔For the following month-ends, foreign stocks are the highest among the BIST 30 stocks. Akbankin, Tupraşin, Turkish Airlinesin and Tofasentered.
➔With the purchase of foreigners and then shares coming from the locals to the bank, the stock exchange made the monthly premium in August, which it had not been able to afford for a long time increased by 25 percent. The stock market returned 29 percent in December 2003, a higher premium than that rate.
➔With the bank move The sharp rise in the stock market increased to 141 percent last year.
With this surcharge, the stock exchange gained the status of the investment vehicle with the highest return in August.
➔Banks, on the other hand, made a premium of 215 percent last year. The banking index has risen by 95 percent since the beginning of August.
WHAT HAPPENS TO THE BANK’S PROFITS?
Meanwhile, banks’ obligation to hold bonds at the interest rate applicable to loans triggered a new wave of buying in this market. Interest rates fell nearly 5 points. This goes hand in hand with the increase in bank profits in the current quarter.
➔Alright In 7 months of the year, banks increased their profits by 505 percent from 40.2 billion liras to 207.8 billion liras last year.
➔The banks will write strong profits from their bond portfolios due to the sharp drop in interest rates, but there is a high risk that these profits will fall in the next accounting periods if interest rates rise.
➔It is therefore a short-term approach to turn to bank stocks with the expectation of an explosion in profits.
➔In addition, profits from banks cannot be freely distributed like companies, but only to the extent permitted by the BRSA. After the global crisis of 2008, the banks’ profit distribution was severely restricted.
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