The History Of Turkish Stock Market
FINANCIAL MANAGEMENT THE HISTORY OF TURKISH STOCK MARKET
In this project, it will be expained the history of the Turkish Stock Market. To understand it clearly, first of all it is clarified some basic definitions.
2. DEFINITION OF STOCK
A stock is an ownership share in a corporation.  Each of these shares denotes a part ownership for a shareowner, stockholder, or shareholder, of that company. Stocks are traded on exchanges all over the world, the largest is the New York Stock Exchange or NYSE.
3. DEFINITION OF STOCK MARKET
Investopedia expains that ; “The stock market lets investors participate in the financial achievements of the companies whose shares they hold. When companies are profitable, stock market investors make money through the dividends the companies pay out and by selling appreciated stocks at a profit called a capital gain. The downside is that investors can lose money if the companies whose stocks they hold lose money, the stocks’ prices goes down and the investor sells the stocks at a loss. 
4. FOUNDATION OF STOCK MARKET
Although, we try to explain the history of Stock markets briefly, it takes a long pages of descriptions. Stock market was born very long ages ago because it is a need of humanity. It was occured when people changed goods or something like that. Is was a economic exchange between people. It changed day by day according to needs of people. The people who have the same art and trade comes together in fairs or kermis so during the time, it becomes the stock market as now.
In the near past, state, the community was formed which name was “loggia” by the traders of the Rome state. Spain traders interested in this community and they built up their own community name was “Lonca”. After that Spain trader came to Turkey and they laid the first foundations of the Turkish Stock Market. 
After trader guilds from Spain came to Turkey, at Tanzimat period the real stock exchange market was built up as a official institution. Before conquest of Istanbul, Venetians and Genoese put in their hands trade in Istanbul so we cannot gather clear information about the trade relations before that time.
Nevertheless, in the sixteenth and seventeenth century, the government try to meet requirements by their own resources so lots of artists were trained at that period.
5. HISTORY OF TURKISH STOCK MARKET
The Ottoman State had financial problems in the middle of the 17th century. At 18th century, there were some changes and reforms to overcome financial problems but economy went from bad to worst. At the same time, Ottoman military can not settle the military technological revolutions in Europe so they lost the war. This situation cause additional load to Ottoman economy. Moreover, Europe made price revolution, mercantilist applications broke down the tax system of the Ottoman state and influation had growth rapidly. At 19th century, Ottoman state try to meet credit requirement from Galata bankers. 
The origin of an organized securities market in Turkey has its roots in the second half of the 19th century. At early years, only foreign companies had exported their bond and stocks. The development leading the Ottoman State to obtain credit from abroad markets has been
starting since the Crimean War. The credits obtained from the foreign stock markets produced the transactions of state debenture bonds and shares. These transactions forced the establishing of a stock exchange. In the end, the first stock exchange in the Ottoman State was established with the name of “Stock exchange of Debenture bonds of Dersaadet” in 1866. In 1866, first official securities market was established which name “Dersaadet Securities Exchange” . At the end of the century, this securities market was become the largest stock markets in Eastern Europe. The minorities managed the securities market at that time.
After some period later, Turkish securities market was closed and reopen with a new name “Esham ve Tahvilat Borsası” in 1906.
In republican period 1926, it was established “Istanbul Securities and Foreign Exchange Bourse”. But these activities can not add movement to the market.
In 1936, the Turkish stock market locate in Ankara by government intervention. But then, it was relocated in Istanbul in 1941. In 1980s fast reconstruction shifted the stock market and there were observered very live market. 
The Istanbul Stock Exchange (ISE) was the only corporation in Turkey for securities exchange established to provide trading in equities, bonds and bills, revenue-sharing certificates, private sector bonds, foreign securities and real estate certificates as well as international securities. . The ISE was founded as an autonomous, professional organization in early 1986. It is situated in a modern building complex in the quarter of İstinye, on the European side of Istanbul, since May 15, 1995.  The chairman and chief executive officer of the ISE is Dr. İbrahim Turhan, who was appointed by the government on January 1, 2012. 
ISE is home to 320 national companies. Trading hours are 09:30–12:30 for the first session and 14:00–17:30 for the second session, on workdays. All ISE members are incorporated banks and brokerage houses. 
ISE price indices are computed and published throughout the trading session while the return indices are calculated and published at the close of the session only. The indices are: ISE National-All Shares Index, ISE National-30, ISE National-50, ISE National-100, Sector and sub-sector indices, ISE Second National Market Index, ISE New Economy Market Index and ISE Investment Trusts Index. The ISE National-100 Index contains both the ISE National-50 and ISE National-30 Index and is used as a main indicator of the national market. 
The ISE is a full member of
• World Federation of Exchanges (WFE),
• Federation of Euro-Asian Stock Exchanges (FEAS),
• International Securities Services Association (ISSA),
• International Capital Market Association (ICMA),
• European Capital Markets Institute (ECMI),
• World Economic Forum (WEF),
• Federation of European Securities Exchanges (FESE) and
An affiliate member of
• International Organization of Securities Commissions (IOSCO).
The Borsa Istanbul (abbreviated as BIST) is the sole exchange entity of Turkey combining the former Istanbul Stock Exchange (ISE) (Turkish: İstanbul Menkul Kıymetler Borsası, IMKB), the Istanbul Gold Exchange (Turkish: İstanbul Altın Borsası, İAB) and the Derivatives Exchange of Turkey (Turkish: Vadeli İşlem Opsiyon Borsası, VOB) under one umbrella. It was established as an incorporated company with a founding capital of 423,234,000 (approx. US$240 million) on April 3, 2013, and began to operate on April 5, 2013. Its logo will be the traditional Ottoman mark for Istanbul, the tulip. Its slogan will be “worth investing”. 
Shareholders of Borsa Istanbul are: 49% Government of Turkey, 41% IMKB, 5% VOB, 4% IMKB members, 1% IMKB brokers and 0.3% IAB members. It is planned that all the Government-owned shares will be offered for sale. Among the executives of the nine-member board of directors, which is presided by former chairman of ISE İbrahim Turhan, are former deputy chairman of ISE Osman Akyüz, former head of VOB Işınsu Kestelli, Merrill Lynch Investment Bank General Manager Hüseyin Kelezoğlu and Chairman of Turkish Association of Capital Market Intermediary Institutions Attila Köksal.
A brief timeline and milestones of Turkish capital markets are presented below:
Figure 1.1 
Historical Events In Istanbul Stokexchange Market From Borsa Istanbul Official Web Site 
1985 March: Appointment of Mr. Muharrem KARSLI as Chairman and CEO of the İMKB. December: Inauguration of the İMKB under the Chairmanship of Mr. Muharrem KARSLI
1986 January: Commencement of stock trading at the Cagaloglu building on January 3, 1986
1987 October: Commencement of daily calculation of İMKB Indices which had so far been calculated on a weekly basis
November: Moving to the new building in Karakoy and initiation of the Manual Board System
December: External auditing of listed companies required
1989 July: Establishment of the Settlement and Custody Center
August: Issuance of Decree 32 which allows foreign investors to purchase and sell all types of securities in Turkey and repatriate the proceeds
1990 March: Appointment of Mr. Yaman TORUNER as Chairman and Chief Executive Officer of the İMKB
1991 January: Commencement of the calculation of Financials and Industrials Indices in addition to the İMKB Composite Index
June: Initiation of the Bonds and Bills Market and commencement of Outright Purchases and Sales Transactions
1992 January: Transformation of the Settlement and Custody Center into an independent company
February: Commencement of trading of Corporate Bonds and Revenue-sharing Certificates in the Bonds and Bills Market
October: Acceptance of the İMKB as a full member to The World Federation of Exchanges (WFE, previously FIBV)
1993 January: Launch of the Rights Coupon Market and New Shares Market
February: Initiation of the Repo/Reverse Repo Market
October: Recognition of the İMKB by the U.S. Securities and Exchange Commission (SEC) as a “Designated Offshore Securities Market”
December: Initiation of computerized stock trading with 50 stocks
1994 April: Appointment of Mr. Tuncay ARTUN as Chairman and Chief Executive Officer of the İMKB
September: Initiation of Small Orders Market in the Bonds and Bills Market
November: Full automation of stock trading
1995 January:Launch of the Regional Markets and the Wholesale Market
March:Designation of İMKB Settlement and Custody Company as an “Eligible Foreign Custodian” by U.S. Securities and Exchange Commission (SEC)
March: Initiation of Custody Services on customer basis by the İMKB Settlement and Custody Company
April: Disclosure of detailed balance sheet and income statements of companies including footnotes
April: Initiation of short selling transactions April: Launch of the New Companies Market
May: Moving to the new building in Istinye
May: Establishment of the “ Federation of Euro-Asian Stock Exchanges ” (FEAS) with 12 members
May: Establishment of Investor Counselling Center designed to provide information on the İMKB’s operations and traded companies
May: Recognition of the İMKB as an “appropriate foreign investment market for the private and institutional Japanese investors” by the Japan Securities Dealers Association (JSDA)
July: Transformation of the İMKB Settlement and Custody Company into the İMKB Settlement and Custody Bank (Takasbank)
1996 January: Initiation of banking services of the İMKB Settlement and Custody Bank
July: Accepting of the applications for listing and trading on the İMKB International Market.
September: Foreign Currency Denominated Government Debt Securities started to traded at the Outright Purchases and Sales Market of the Bonds and Bills Market.
December: Launch of the International Bonds and Bills Market within the İMKB International Market
1997 January: Introduction of new Stock Market indices as integers with the drop of two digits from base values.
February: İMKB International Bonds and Bills Market has started its operations upon the listing of 40 international bonds issued by the Undersecretariat of Treasury for trading abroad.
August: Decease of İMKB Chairman & CEO Mr. Tuncay ARTUN
August: Launch of the Repo and Reverse Repo Market on İMKB International Market
October: Appointment of Mr. Osman BIRSEN as Chairman and CEO of the İMKB.
1999 January: İMKB started to calculate İMKB 100 Index on Euro basis.
May: İMKB Settlement and Custody Bank (Takasbank) introduced the client name-based custody system.
June: A “Memorandum of Cooperation” between the İMKB and London Stock Exchange was signed on June 2, 1999.
June: Memorandums of Cooperation were signed between the İMKB and the stock exchanges of Republics of Kazakstan, Kyrgyzstan and Uzbekistan.
July: The new computerized trading software for the Bonds and Bills Market, which had been developed within the framework of Wide Area Network (WAN) project since 1996, had been successfully completed and put into operation.
August: Starting from August 24, 1999, short-selling transactions and margin trading became available in all stocks traded on the İMKB’s markets. Previously, authorized İMKB members had the opportunity to engage in short-selling transactions only in stocks constituting the İMKB-National 100 Index.
September: İMKB’s Executive Council changed the trading hours for the Bonds and Bill Market. Accordingly, trading started to take place between 9:30-12:00 and 13:00-17:00.
2000 May: İMKB participated in the capital of the Kyrgyz Stock Exchange by 27.4 percent upon its demutualization.
May: Primary dealership system was launched for Government Debt Securities.
June: İMKB participated in the capital of the Baku Stock Exchange by 5. 26 percent as the 19th shareholder.
July: The number of members operating from their main offices at the Bonds and Bills Market, as a part of the Wide Area Network (WAN) project, reached 50.
July: Within the context of Wide Area Network Project, trading at the İMKB’s Stock Market via workstations located at the headquarters of İMKB members started on July 31, 2000. The number of members operating at the Stock Market from their offices reached 98 at the end of 2000
2001 October: The “Memorandum of Understanding” signed between the Korea Stock Exchange and the İMKB in 1996, has been renewed indefinitely on October 18, 2001.
December: Transition to Ex-API system within the framework of the Wide Area Network has started gradually.
2002 August: Stocks of companies, trading of which were suspended by the İMKB for the reason that the disclosure requirements have not been fulfilled resulting with uncertaines preventing the formation of a health market, started to be traded off-exchange in line with the regulations entitled “Principles concerning off-exchange trading of stocks exchange trading of which have been suspended by the İMKB” published on July 19, 2004.
November: Osman Birsen was re-appointed as İMKB Chairman & CEO.
2003 March: All orders submitted to the Stock Market for all stocks and during all sessions have been required to include customer account numbers.
March: Regional Markets and New Companies Market were renamed as Second National Market and New Economy Market, respectively.
2004 November: The “ETFs Market” was established with an aim to provide an organized and transparent market for trading of participation certificates of the ETFs.
2005 February: İMKB Executive Council has decided to launch a new index namely “İMKB Corporate Governance Index”.
March: Between March 28-29, 2005, the Organization of Islamic Conference (OIC) Member States’ stock exchanges representatives and OIC institutions met in Istanbul, Turkey for the first round-table meeting among the stock exchanges of the OIC Member States.
2006 December: As of December 27, 2006, the İMKB International Market and its submarkets (Depositary Receipts Market and International Market Bonds and Bills Market) was closed.
2007 April: International Bonds Market has started its operations within the İMKB Foreign Securities Market on April 16, 2007. In the Market, listed Turkish Sovereign Eurobonds have been traded.
August: İMKB started to calculate the Corporate Governance Index.
October: The “Memorandum of Understanding” was signed between the İMKBand the Shanghai Stock Exchange on October 16, 2007.
November: Appointment of Mr. Huseyin ERKAN as Chairman and CEO of the İMKB.
2008 October: Mr. Hüseyin Erkan was elected as the Working Committee Chairman and member of the Board of Directors of the World Federation of Exchanges (WFE).
2009 February: City Indices launched for 9 cities
March: The Emerging Companies Market was established.
May: Public Disclosure Platform launched
2009 August: İMKB Emerging Companies Market Regulation was published with an aim to provide an organized and transparent market for trading of companies with growth and development potential.
2010 May-December: IPO Summit Turkey
July: Inauguration of Continuous Auction via Market Making Trading Mechanism
October-November: Stocks started to be traded as classified into A, B, C groups, Implementation of Unconditional Order Cancellation, Initiation of Phase I of Reducement in Price Ticks
Bonds & Bills Market: Offering Market for Qualified Investors, The Interbank Repo-Reverse Repo Market, Repo Market for Specified Securities were established
December: 25. Anniversary of the İMKB
2011 January: İMKB launched the Automatic Circuit Breaker System.
January: Establishment of The Interbank Repo-Reverse Repo Market.
April: New regulation on the sale methods in the Primary Market to be initially listed on the Exchange.
•Book Building and Sale with a Fixed Price Method (Fixed Price Method)
•Book Building and Sale with Variable Price Method (Variable Price Method)
July:İMKB launched the Dividend Indices
2012 January: Appointment of İbrahim M. Turhan as İMKB Chairman & CEO
March: İMKB launched the Financial Education Platform “Conscious Investor”
May: İMKB started calculating IPO index
May: Launch of İMKB Free Trade Platform
1- http://www.wikinvest.com/wiki/What_is_a_stock%3F#_note-0 Wall Street Words: An A to Z Guide to Investment Terms for Today’s Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. ISBN-10: 0618176519 pg359
2- http://www.investopedia.com/terms/s/stockmarket.asp (Access Date:15.12.2013)
5- Istanbul Stock Exchange: “İMKB’nin Kuruluşundan İtibaren Önemli Gelişmeler” (Timeline of important events since 1985)
7- Turkish Capital Markets & The Brokerage Industry 2007, TSPAKB Publication No. 35
8- “Borsa İstanbul’un kuruluş sermayesi”. TRT Haber (in Turkish). 2013-04-04. Retrieved 2013-12-18. http://www.trthaber.com/haber/ekonomi/borsa-istanbulun-kurulus-sermayesi-81027.html
9- “First gong of Istanbul’s new bourse to be banged”. Hürriyet Daily News. 2013-04-05. Retrieved 2013-12-18. http://www.hurriyetdailynews.com/first-gong-of-istanbuls-new-bourse-to-be-banged.aspx?pageID=238&nID=44304&NewsCatID=346
10- “Milestones In Borsa Istanbul History”. http://borsaistanbul.com/en/corporate/about-borsa-istanbul/milestones-in-borsa-istanbul-history
11- OSMANLI’DA BORSA: DERSAADET TAHVİLÂT BORSASI’NDAN ESHÂM VE TAHVİLÂT BORSASI’NA YENİ DÜZENLEME GİRİŞİMLERİ Fırat University Journal of Social Science.
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