The benchmark National-100 index of the İMKB opened at 60,999.73 points on Monday, up from last Friday's closing of 60,998.84. The opening on Monday and the closing before the weekend are both all-time records in the market's history. Info Securities Inc. Sirkeci branch director Selim Işıklar says the impressive increase in the stock exchange happened because foreign investors embarked on heavy acquisitions before the nearing referendum, with an expectation that its result will be in favor of the reform package which should give a further boost to markets.
“As was the case before the July 27 [2007] general elections, foreign investors bought almost $1 billion of shares, particularly in the last two months. We also see that they increased their investments just before the popular vote on the constitutional amendments. The İMKB’s index, which closed last week by setting a new record, will approach a high of 70,000 if “yes” comes out [of the ballot box] in the referendum which will be held on Sept. 12,” he argued in his Sunday column at Zaman daily, also adding that if the proposed changes are rejected, then the index will retreat back to 52,000.
Following the İMKB’s rise, deputy-Prime Minister and State Minister for Economy Ali Babacan also said markets had already started to benefit from a conclusive “yes” result. Its index closed at 60,900.72 points yesterday. Babacan, however, also said that Turkey would pay the economic price, if people disapprove of the proposed changes.
Işıklar explained that the markets’ possible sufferings from a “no” result would derive because investors would start to act according to early general elections prospect. “It is obvious that expectations for approval are dominant in the market, given the increasing growth of money inflows to the İMKB. If it had not been this way, rough sales would have become indispensable at around this time. For sure, this does not mean that the result will certainly be ‘yes’. When we examine the only two possible results, it is clear that a ‘no’ result is the markets’ nightmare because investors, though Prime Minister Recep Tayyip Erdoğan downplayed that possibility, could not ignore the risk of an early general election,” he stated.
