IPOs in Turkey
Capital markets facilitate fund raising opportunities for businesses
which aspire to invest for sustainable growth in a highly competitive
environment. Public offerings play a pivotal role in ensuring that
businesses gain international competitive advantage as well as global
Economic activities are realized by family businesses to a great
extent in Turkey, as is the case in the rest of the world. Once such
companies reach a certain size, they are no longer mere family
businesses but become the heart and soul of the national economy,
an essential constituent of the national wealth, and a valuable
engine of employment. Therefore, it is very important to convert
these constituents of national wealth into sustainable companies
that outlast the current generation. We have always emphasized the
importance of establishing a corporate culture and fostering growth,
and both of these goals are best realized through institutionalization,
in other words corporate governance.
In spite of the fact that capital markets offer a wide range
of opportunities for companies, including low-cost funding,
institutionalization, international and local visibility, liquidity for
shareholders, and credibility, many of the leading Turkish companies
do not yet have access to the important facility of trading on the
Istanbul Stock Exchange (ISE).
We initiated the Initial Public Offering (IPO) Campaign in
cooperation with the Capital Markets Board of Turkey (CMB), the
Union of Chambers and Commodity Exchanges of Turkey (TOBB),
and the Association of Capital Market Intermediary Institutions
of Turkey (TSPAKB) on August 7, 2008. The Campaign is aimed at
ensuring that companies have access to the opportunities offered
by capital markets, raise the funds they need for growth, and assure
their sustainability by going public.
We aim to attract the 1,000 largest Turkish companies to the ISE as
well as to increase the awareness of capital markets with the SMEs
through a special market segmentation with many advantages. Also,
we would like to increase the number of companies listed on the
ISE from its current standing of 339 to over 1,000 by 2023, when
we will be celebrating the centennial anniversary of the Turkish
The first all-embracing occasion in which public offerings were
encouraged in Turkey was the IPO Istanbul Summit, held in Istanbul
on May 6-7, 2010. The Summit brought together over 2000 top
level executives from 514 leading Turkish companies that are not
yet traded on the Istanbul Stock Exchange. Throughout the Summit,
the ISE convened all the parties involved in initial public offerings in
an exhibition-like environment, where they had the opportunity for
face-to-face contacts. Brokerage companies authorized for public
offerings, independent audit firms, law firms, private equity funds,
domestic and international institutional investors, consultancy firms,
and sectoral associations were invited to take part in the Summit
by opening stands, organizing workshops, and holding one-toone
meetings with companies, and thereby directly informing the
executives of companies which have a potential to go public about
A similar event will be held this November in Bursa, home to some
of the leading Turkish industrial companies, mainly operating in the
textile, automotive, agricultural and machinery sectors. We are also
planning to hold IPO Summits in two other cities next year.
The Istanbul Stock Exchange has already started to harvest the fruits
of the Initial Public Offering Campaign, which has been underway for
more than two years.
During 1990-2000, an average of 24 companies went public yearly,
but this average fell to 6 companies for the period of 2001-2009.
During the first ten months of 2010, 16 companies went public, with
12 applications currently under review. We expect more companies
to start trading on the ISE next year. Additionally, it is also worth
noting that during the first ten months of 2010, ten private sector
bonds were offered to public for the first time in decades.
The dynamism brought to the market by the IPO Campaign has
influenced foreign companies as well, as we have received listing
applications from foreign companies for the first time. We expect
the first foreign company to start trading on the ISE in the last
months of 2010.
In 2010, the ISE also introduced a variety of new financial
instruments. Non-voting shares and warrants started trading on the
ISE. On another front, the corporate bond market is showing signs of
revival as a result of decreased domestic borrowing requirements.
I would also like to add that a new market, namely “Offerings
Market for Qualified Investors” has been established in the ISE. In
this market, the corporate bonds of companies traded on the ISE
Stock Market will be issued for trading by qualified investors only,
without preparing a prospectus or circular.
We expect to continue the promotion and awareness activities
regarding initial public offerings in cooperation with the Capital
Markets Board of Turkey (CMB), the Union of Chambers and
Commodity Exchanges of Turkey (TOBB), and the Association
of Capital Market Intermediary Institutions of Turkey (TSPAKB)
in various cities with the participation of chambers of industry
and commerce. This will create the synergy to accelerate the
development of Turkish capital markets. In this process, the ISE also
plans to initiate an “Investor Campaign”, aimed at ensuring that
savings are attracted to capital markets.