Stock Allocation in Turkish Capital Markets: Industry and Firm Level Perspectives

Abstract

Investors’ trading patterns has been an intensively researched topic in emerging markets depending on their significant role and power in the capital markets. This paper provides what global and domestic factors have driven the stock allocation of investors in Turkey and how has the crisis changed investors’ attitude toward stock allocation between the years 2006 and 2016. Year-end stock allocation data are obtained from the Central Securities Depository Institution of Turkey. Stock allocation has been investigated mainly in terms of the domestic and foreign stock investments. A detailed classification of investors as individual and institutional investors in terms of investment funds, corporate and investment trusts with firm and industry levels has also been evaluated. The variations on stock allocation has been examined in BIST Industrials, Financials and Services Industries. Additionally, this paper gives an insight about the firm and industry level stock allocation in Turkish Capital Markets considering the responsible stockholders. Corporate governance practices are considered to be strengthened with the growing role of institutional investors in the financial system, which provide insights about the investor profile of BIST Corporate Governance Index in the related period.