Some foreign investors cashing out in February

Dünya Executive - - COMMENTARY - Alaatt n AKTAS Economist

In February, foreigners became net sellers both in the stock market and government debt security after a large amount of purchases were made in January. The amount raised for capital increases was also effective in this.

Although the data for February 1 is included in the sum for February, this amount mostly represents the realizatio­n in January. February 1 data consists of the sum of the transactio­ns made on January 28, 29, 30, 31 and February 1. Therefore, the inflow on February 1 also belongs to January. Except for the exit in the first week of January, there was a continuity of inflow in the stock market over the remainder of the month. From January 4 to February 1, there was a net inflow of $1.4 billion.

In this period, when foreigners heavily purchased stocks, prices in the stock market went up significan­tly. However, there was a break in the trend in February. Foreigners sold $105.6 million in the first week and another $ 63.7 million in the second.

Despite the sales, the share of non-residents’ stock purchases over the first month and a half of the year amounted to net posi-

tive of $1.2 billion.

Ex ts from government debt secur t es

Non-residents generated a net total of $638 million in government domestic debt securities in the first one and a half month period. It was noted that net purchases were made in only one week of the seven-week period. The other six weeks were all about net sales. Net inflows including stocks and government debt securities in the first one and a half month period of the year totaled $528 million.

Far from be ng enough for Turkey

The money that came in to Turkey over a month and a half was only half a billion dollars! Of course, this is the amount of portfolio investment. In addition, there are direct investment­s and borrowing in the banking system. They are separate figures which show up in the balance of payments. However, the foreign exchange that foreign residents bring as a portfolio investment through the purchase of shares and government debt securities is of course important. And half a billion dollars over one and a half months is worrisome.

We give almost the highest interest in the world but we cannot attract the savings of people in developed countries looking for smart investment­s. Some countries have negative interest while we’re giving 20 percent interest, but nothing happens. Do we ever wonder why a foreign fund does not prefer Turkey even though it can get the same interest it would over 10 years in another country in one year in Turkey?

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