As of August 2024, the world has seen some global stock increases at almost all-time high levels, such as Bangladesh index gaining around 13.4%. However, Türkiye has experienced a downfall, despite this pattern in the world.
After one of the most economically chaotic days of the near history, August 5, 2024, more commonly known as Black Monday, many countries’ economic states were affected detrimentally. Türkiye was one of the countries that was impacted by this fall, and the market was still experiencing a fall while many countries were experiencing a rise in their stock market as they get into the recovery stage. The high volatility of the stock markets after and during the Black Monday caused many big countries experience catastrophic falls on several companies’ stock market values. As in the market plummet, US stock markets fell sharply, following the falls in Europe and Asia, along with multiple other countries. Japan is one that was impacted by this market plummet dramatically.
The decrease in Türkiye’s greatest stock market, Borsa Istanbul 100, BIST 100, was mainly caused by the high rate of interest, which is 50%, as well as the inflation. With the Black Monday incident, markets, indexes were impacted severely and the BIST 100 has experienced a fall by 8.2% in August 2024, becoming the worst performing stock market when compared to others. It is important to note that the maximum fall a stock market can achieve is 10%, as it is a limit set, therefore, the rate 8.2% is very crucial and problematic for traders and investors. As a result, this has impacted the actions of foreign investors, as they are now pulling out more cash every day.
The concerns of the Turkish people, especially the investors, relies on the outcomes of this decrease in the long run. Türkiye is experiencing economic hardships like inflation, and the interest rate being 50%, which was an action taken by the Central Bank aiming to control the deal with the fixation of the current status.
Ata Investment, a Turkish investment and wealth management firm, suggested that it’s believed that the Turkish companies they keep track of will declare a drop around 28% in their net income for 2024. A Turkish fund manager said that the long term effects are still unknown and that it is still not clear to see how much of a negative impact will be experienced. He also added that “Türkiye’s tight monetary policy and economic crunch will be more visible in third-quarter earnings.” It is possible to say that investors are skeptical and should act meticulously in their investments.
Several monetary authorities declared that they are pulling themselves back from BIST 100, which is once again not contributing to the recovery of the Turkish stock market. Türkiye is trying to find some solutions to recover from this severe fall; however, the steps that will be taken are still not certain.