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CHAPTER 7 SECONDARY MARKETS
Fuctions of the Secondary Markets • It provides information about the value of the security. • It provides liquidity to the investors. • It provides information to the investors about the assets fair values. • It brings together many interested parties and so can reduce the cost of searching likely buyers and sellers of the asset. • By accomadating many trades they keep the cost of transactions low. By this way they encourage investors to purchase assets.
Trading Locations • Secondary market exist throughout the world. • In the US, many shares are traded on major national and regional stock exchanges. Additional significant trading in stocks take place on OTC markets. Some bonds are traded on exchanges however most bonds are trade on OTC markets. • Londan International Stock Exchange is an OTC market. Assets that are traded in this market include stocks of domestic and international firms, bonds and options. • Germany has 8 stock exchanges, the most important of which is Frankfurt Stock Exchange. • Paris Bource is the France’s main secondary market for stocks, bonds and some derivative instruments. • Japan has 8 exchanges, the largest is Tokyo Stock exchange and the second largest is Osaka Stock Exchange.
Market Structures • Many secondary markets are continuous markets: prices are determined continuesly throughout the trading day as buyers and sellers submit orders. • A contrasting market structure is the call market, in which orders are batced or grouped together for simultaneous execution at the same price. The market maker can hold an auction for a stock.
Perfect Markets • In perfect market, the nr. of buyers and sellers is sufficiently large and all participants are small enough relative to the market, so that no one can influence the prices. • In perfect market transaction costs and taxes (frictions) do not effect the prices and investor’s behavior.
SECONDARY MARKET TRADING MECHANISM Types of Orders Market Order Limit Order Stop (Stop-Loss) Order Stop-limit • Market Order: It is an order to buy or sell the security at the best price available. When this order reaches to the trading floor, its execution is sure and immediate.
Limit Orders: These are the orders to buy or sell a security at a specified price or better. To avoid the danger of the market order which is the adverse unexpected price changes between the time investor places the order and the time the order is executed, an investor can place the limit order. A buy limit order indicates that the security may be purchased only at the designed price or lower. A sell limit order indicates that the security may be sold only at the designed price or higher. For exp. You want to buy stock A at $42 and do not want to pay more than this amount, you places a limit order at $42. Or you want to sell stock B at $65 and do not want to sell less than this amount, you places a limit order at $65. There is no guarantee it will be executed at all.
• Stop Order (Stop-loss order): The order is not to be executed until the market moves to a designed price, at which time it becomes a market order. A stop order to buy specifies that the order is not to be executed until the market rises to a designated price. A stop order to sell specifies that the order is not to be executed until the market price falls below a designated price. For exp. You are uncertain about buying the stock of A at its current price of $42 but want to be sure that if the price moves up you do not pay more than $45. If you places a stop order to buy at $45, the order becomes a market order when the price reaches $45. If you want to assure that you will not sell stock B at less than $60, you can place a stop order to sell at $60. - Security prices sometimes exhibit abrupt price changes, so the direction of a change in a security’s price may be temporary. - Once a designated price is reached, the stop order becomes a market order and is subject to the uncertainity of the execution price.
• Stop-limit Orders: Combination of stop order and limit orders to buy or sell at a specified price or better only after a given stop price has reached. • In contrast to the stop order, which becomes a market order if the stop is reached, the stop limit order becomes a limit order if the stop is reached. • Buy stock A “$42 stop, $45 limit”, If the market price reached $42, the broker enters a limit order to be executed at $45 or better (lower) price.
Market Efficieny • Operational Efficiency: In this market investors can obtain transaction services as cheap as possible. • Pricing (Information) Efficiency: It refers to a market where prices immediately and fully reflect all available information that is relevant to the valuation of securities.
• E. Fama classified the pricing effciency of a market into three forms: weak, semi-strong and strong. • Weak form efficiency: the price of the security reflects the past price and trading history of the security. • Semi-strong form efficieny: In addition to the historical price, the price of the security fully reflects all publicly available information. • Strong form efficieny: the price reflects all information that is available and unavailable publicly.
BORSA ISTANBUL • Capital Markets Board Law no. 6362 went into force after being in published in the Official Gazette dated December 30, 2012. • It was founded on the same date, for the purpose of serving as a securities exchange. • Borsa Istanbul brings together all the exchanges (VOB and Istanbul Gold Market) operating in the Turkish capital markets under a single roof.
BORSA ISTANBUL • The main purpose and field of activity of Borsa Istanbul is described as follows: "In accordance with the provisions of the Law and the related legislation, to ensure that capital markets instruments, foreign currencies, precious metals and gems, and other contracts, documents, and assets approved by the Capital Markets Board of Turkey are traded subject to free trade conditions in a facile and secure manner, in a transparent, efficient, competitive, fair and stable environment; to create, establish and develop markets, sub-markets, platforms, systems and other organized market places for the purpose of matching or facilitating the matching of the buy and sell orders for the above mentioned assets and to determine and announce the discovered prices; to manage and/or operate the aforementioned or other exchanges or markets of other exchanges; and to carry out the other activities listed in its Articles of Association. "
BORSA ISTANBUL • Established on the basis of Capital Markets Law no. 6362, Borsa Istanbul is an internal entity under private law (özel hukuk tüzel kişiliğini haizdir). Borsa İstanbul is a selfregulatory entity. • Borsa Istanbul CEO is also the Chairman of the Board and is authorized to manage, administer and represent company. Borsa Istanbul is committed to contributing to the development of the Turkish economy.
FINANCIAL ASSETS TRADED IN BORSA ISTANBUL • Equities • Exchange Traded Funds • Warrants • Options • Futures • Certificates • Debt Instruments • Lease Certificates
EQUITIES • Equities are negotiable instruments issued by a corporation and representing a capital share of the corporation. • Holding the equity of a corporation means being a partner of that company.
RIGHTS OF EQUITY HOLDERS • Dividend Right: An equity entitles its owner to get a share of the yearly net profit of a company. Dividends are paid to equity holders when the company decides to distribute dividends at its general assembly. • Pre-emptive Right: It entitles a priority to the equity holder to participate in the capital increase of the company through a rights issue. The subscription period to exercise the pre-emptive right is 15 to 60 days. Rights coupons can be traded on the Rights Coupons Market.
RIGHTS OF EQUITY HOLDERS • Right to Share in Liquidation Balance: If there remains any balance after the company’s liquidation, the equity holder participates in such balance in proportion to his shareholding interest. • Right to Participate in the Management of a Company: The equity holder is entitled to attend the general assembly, elect, and be elected a member of the board of directors.
RIGHTS OF EQUITY HOLDERS • Voting Right: Each equity vests minimum one voting right in its holder. Yet, the number of voting rights which an equity will vest in its holder may be determined by the articles of association, and the voting rights attached to a single share may be increased. Companies may also grant dividend benefits, issuing equities without a voting right. • Right to Receive Information: It is essential that an investor in an equity has access to information related to the company. The equity holder’s right to receive information cannot be prevented or limited with the articles of association or a decision of the company. Publicly-held companies are obligated to disclose any important information/news related to the company’s condition in the most practical way. Companies also disclose their independently-audited financial statements on a
TYPES OF EQUITIES • Registered and Bearer Equity (Hamiline ve Nama Yazılı) Bearer equities are transferred upon delivery whereas registered equities are transferred upon endorsement and delivery. Bearer equities, and registered equities, may be traded on Borsa İstanbul if only the company's board of directors authorizes transfer through blank endorsement. • Common and Preferred Equities (Adi ve İmtiyazlı) Common equities grant equal rights to their holders. Unless otherwise stipulated in the articles of association, equities are common equities. Preferred equities provide their holders with a set of preferential rights with regard to the sharing in the profit and casting votes at the general assembly.
TYPES OF EQUITIES • Bonus and Paid-up Shares (Bedelsiz ve Bedelli) • A bonus issue is a distribution of free shares to shareholders in exchange of an amount which is added to the capital from the company's internal resources. It does not lead to an inflow of outside funds. Shares issued for this transactions are free shares. A rights issue is the sales of “paid-up” shares issued by a company to supply new funds at their nominal value or a higher price. Paid-up shares can be sold to existing shareholders (pre-emptive right) as well as to other investors.
TYPES OF EQUITIES • Premium and Non-premium Stocks (Primli ve Primsiz) Equities issued at par (nominal value) are called non-premium equities, whereas equities issued at a price higher than the nominal value are called premium-equities. Companies listed on Borsa İstanbul are subject to authorized (registered) capital system, and can issue premium equities provided that it is permitted in their articles of association and there is a decision of the board of directors to that effect.
TYPES OF EQUITIES • Founder Shares and Dividend Shares (Kurucu ve İntifa) Founder shares are shares that entitle the holder to participate in part of the company’s capital in consideration of the foundation services as per the provisions of the articles of association, and that are always registered in the names of the founders. Founder shares neither represent a certain capital interest nor vest any right to participate in the company’s management. Dividend shares are given in consideration of certain services and receivables to certain people, depending on the decision of the company's general assembly and do not represent any capital interest.
EXCHANGE TRADED FUNDS Exchange traded funds (ETFs) are funds traded on equityexchanges, which are based on an index and aim to reflect the performance of its base index to the investors. ETFs are issued based on an index, and invest in the securities on its base index in proportion to their weight in the index. Thereby, for example, an investor willing to invest in BIST-30 index invests in an ETF rather than purchasing the equities of the index separately, he has the opportunity to invest in that index, and benefits from the proceeds of the index.
EXCHANGE TRADED FUNDS Exchange traded funds are portfolios created by authorized intermediary institutions through the purchase of securities on the base index using the cash collected from investors. ETFs reflect the returns on the equities or other instruments (gold, bond, foreign exchange, etc. ) on the base index. The basic characteristic of ETFs is that their fund participation certificates can be traded on Borsa Istanbul just like equities. Exchange traded fund shares can be traded on the Borsa Istanbul Fund Market through intermediary institutions like equities.
WARRANTS • Warrants are capital markets instruments that give the holder the right, but not the obligation, to buy ('call' warrant) or to sell ('put' warrant) an underlying asset at a specified price (the 'strike' price or 'exercise' price) on or before a predetermined date where such right is exercised by registered delivery or cash settlement. The holder of a warrant buys not the underlying security itself, but the right to buy or sell such underlying security, against the payment he makes.
WARRANTS • Warrants; -are securitized options; ▫ listed on a stock exchange and traded in the relevant market segment. ▫ traded in the secondary market. ▫ settled in the same way as other securities. -are financial instruments of type called “structured products” - are not issued for financial needs of the issuers - are solely under the responsibility of the issuer. -entitle the holder to buy (from) or to sell (to) the issuer an underlying security, a basket of securities, or an index, on or before a particular date, at a predetermined price, against the premium he pays. -represent a right, and not an obligation, for the holder.
OPTIONS • Options are capital markets instruments that give the holder the right, but not the obligation, to buy or to sell an underlying asset at a specified price on or before a predetermined date where such right is exercised by registered delivery or cash settlement. The holder of an option buys not the underlying security itself, but the right to buy or sell such underlying security, against the payment he makes. Currently, Single Stock, Equity Index and USDTRY Options are traded on VIOP.
OPTIONS • Strike Price • Option Premium • Long position (Buying Position) • Short Position (Selling Position) • Call Option (Alım Opsiyonu) • Put Option (Satım Opsiyonu)
FUTURES • A futures contract is a standardized contract between two parties obligating them to buy or sell a predetermined quantity of a specified underlying asset of predetermined features at a predetermined price in a certain maturity. Currently, Single Stock, Index, Currency, Precious Metals, Commodity and Energy Futures are traded on VIOP. • Hedgers • Speculators • Arbitragers
CERTIFICATES • Just like warrants, certificates are financial products that impose a financial burden on issuers against the investor. The funds raised through issuing certificates are under the issuer’s personal financial responsibility. Therefore, it is important for the investor to consider factors such as financial status, payment capability, and credibility of the issuer. • While certificates shall be traded according to the same principles as warrants, with minor differences only, some trading rules may vary according to the type of certificate. Investors should pay special attention to such differences while trading certificates.
DEBT INSTRUMENTS • Government Debt Securities (GDS) (Devlet İç Borçlanma Senetleri-DİBS) • Government debt securities are borrowing instruments issued by the Turkish Treasury in the domestic market. The government is indebted, and pays back the holders of Government Debt Securities the borrowed amount on coupon payment days and at the end of maturity. During their maturity term, government debt securities may be traded by real and legal persons in secondary markets. • Government debt securities are classified on the basis of their maturity term, issue method, the currency in which they are denominated, interest payment method, and whether they carry coupons or not. • According to their maturities; • Government debt securities with maturity terms of 1 year and more are called “Government Bonds”, and • Government debt securities with maturity terms of less than 1 year are called “Treasury Bills”.
DEBT INSTRUMENTS • Central Bank of the Republic of Turkey (CBRT) Liquidity Bills (TCMB Likidite Senetleri) Liquidity bills are used as monetary policy tools issued by the Central Bank of the Republic of Turkey for managing the market liquidity and contributing to the efficiency of open market trading. Liquidity bills are discounted securities, which are issued by the Central Bank of the Republic of Turkey on its own name and account with maturities less than 91 days. • Revenue Sharing Certificates (Gelir Ortaklığı Senetleri) Revenue sharing certificates are those securities entitling their real/legal person holders to the revenues of publicly held infrastructure facilities such as transportation, communication and energy, such as bridges, dams, electricity generators, highways, railroads, telecommunication systems, civil seaports and airports, etc. Revenue sharing certificate holders have no ownership or operation rights on such facilities. Revenue sharing certificates are, by nature, bonds with varying interest.
DEBT INSTRUMENTS • Revenue Indexed Bonds (Gelire Endeksli Senetler) • Turkish Treasury realized its first issue of revenue indexed bonds on January 28, 2009 in order to encourage domestic saving, diversify Government Debt Securities and widen the investor base. The yield of these instruments are indexed to the revenues of the state owned enterprises including Turkish Petroleum Corporation (Türkiye Petrolleri Anonim Ortaklığı-TPAO), State Procurement Office (Devlet Malzeme Ofisi -DMO), General Directorate of State Airports Authority (Devlet Hava Meydanları İşletmeleri-DHMİ) and General Directorate of Coast Safety (Kıyı Emniyeti Genel Müdürlüğü- KIYEM), which are transferred to the state’s budget. The yields of the revenue indexed bonds are related to the state’s income and coupon payments are guaranteed within a minimum and maximum range.
DEBT INSTRUMENTS • Private Sector Bonds (Özel Sektör Tahvilleri) They are issued by joint stock corporations for borrowing purposes. The maturity terms of private sector bonds can be one year or more and may be issued with fixed or variable interest rates. Private sector bonds are mostly sold through a consortium consisting of more than one intermediary institution. The bond holder is a long term creditor of the issuing company. The only right that the bond holder has over the company is merely his credit, and has no right to participate in the company management. The legal relationship between the bond holder and the company ends at the end of maturity. Bond holder is not exposed to the profit/loss risk of the bond issuing company and shall receive his principal and interest, regardless the company makes profits or not.
DEBT INSTRUMENTS • The most important factors that influence the proceeds of bonds are their liquidity and risk. Since company bonds carry higher risk compared to government bonds in consideration of bankruptcy and default in repayment of interest and capital, they mostly offer higher interest. In the case of bankruptcy or liquidation of companies, company debt is repaid first, and therefore, bond holders will have priority of payment over the company shareholders. • With the exception of public debt securities, bond issues are subject to the arrangements of the Capital Markets Board of Turkey. Private sector bonds may be offered to the public or sold without being offered to the public.
DEBT INSTRUMENTS • Commercial Papers (Finansman Bonoları) Commercial papers are discounted short-term borrowing instruments, which are subject to the arrangements of the Capital Markets Board of Turkey. The maturity term of commercial papers may not be longer than one year. Commercial papers are discounted on the basis of their maturity term. • Bank Bills (Banka Bonoları) Bank bills are securities issued by banks as debtor in order to raise funds, subject to the arrangements of the Capital Markets Board of Turkey. The discount rates of such bills, are determined freely by the issuing bank. The maturity term of bank bills to be offered to the public must be between 60 days and 1 year.
DEBT INSTRUMENTS • Asset-backed Securities (Varlığa Dayalı Menkul Kıymet) • Asset backed securities are debt instruments issued by institutions authorized to establish asset financing funds, collateralized by the assets in the financed portfolio. Asset backed securities may be traded on exchanges. • Institutions authorized to establish asset financing funds are banks, leasing and financing companies, mortgage companies and brokerage houses. Asset backed securities may be issued by asset financing funds only. Asset backed securities may be sold to qualified investors with allocation method or by public offering. • Consumer loans (excluding mortgage housing loans) and mortgage loans, loans for motor vehicles, project finance and corporate loans, receivables from leasing contracts, and receivables of the Housing Development Administration of Turkey from real estate sales may be transferred to the portfolios of asset financing funds and asset backed securities may be issued under the collateral of such receivables.
DEBT INSTRUMENTS • Asset-based Securities (Varlık Teminatlı Menkul Kıymetler) • Asset-based securities are issued by banks, financing companies and companies authorized to carry out financial leasing, real estate investment trusts, and public institutions authorized to issue securities, and which are collateralized by the assets in their balance-sheets. • Asset-based securities are under the general liability of the issuers. Assets and receivables that may be subject to assetbased securities issuance are consumer loans, commercial loans, receivables from financial and operational leasing agreements, and etc. • Asset-based securities may be offered to the public or sold to qualified investors without being offered to the public.
LEASE CERTIFICATES • A lease certificate is a security issued by an asset leasing company in order to finance the assets that are acquired or leased, and which entitles its holders to the revenues attained from such assets in proportion to their shares. • Regulations concerning the issuance of lease certificates have been completed by the Capital Markets Board of Turkey and they are introduced to the capital markets as alternative instruments to allow companies to raise funds from the capital markets. • Asset lease companies are joint stock corporations incorporated by brokerage houses, banks and originators, exclusively in order to issue lease certificates. Asset lease companies are incorporated by the originators with the purpose of generating lease income by subletting to the originators the assets assigned to them by the originators, issuing lease certificates backed by the returns from such lease, and assigning the asset in question back to the originator at the end of the lease term.
EQUITY MARKET • Equities and rights coupons of companies (rüchan hakkı kuponları) belonging to various sectors, exchange traded funds (borsa yatırım fonları), warrants and certificates are traded on Borsa Istanbul Equity Market. • Trading in the Equity Market is carried out with “continuous auction”, “continuous auction with market maker” and “single price” trading methods according to price and time priority, with a fully automated electronic trading system. • Trading is carried out in two sessions, one in the morning and the other in the afternoon. An “opening session” is held prior to each of the sessions, and a “closing session” is held at the end of the second session.
EQUITY MARKET Market Definition Symbol BIST STARS The market value of the free float > 100 million TL or included in BIST 100 Z BIST MAIN The market value of the free float > 25 million TL and < 100 million TL N BIST EMERGING COMPANIES The market value of the free float < 25 M G WATCHLIST For companies subject to monitoring and examination according to their financial structure. W COLLECTIVE AND STRUCTURED PRODUCTS Exchange traded funds, warrants, and certificates will trade. Former “Collective Products Market”. K EQUITY MARKET FOR QUALIFIED INVESTORS For companies where shares issued by corporations for direct sale to qualified investors without being offered to public are traded only among qualified investors. Q PRE-MARKET TRADING PLATFORM In line with the CMB’s decision no. 17/519 dated June 3, 2011, as a result of the evaluation of the financial status and ownership structure of publicly held companies whose equities are not traded on Borsa İstanbul, Borsa İstanbul decided to start trading the equities of some companies that are registered with the CMB. Former “Free Trade Platform”
EQUITY MARKET • Primary Market is the market which brings together issuers (those who demand funds) and savers (those who supply funds). Primary Market transactions for the equities to be offered to the public through Borsa İstanbul is carried out between 10: 30 - 13: 00. • Wholesale Transactions Wholesale Market provides an organized, secure and transparent platform for the trading of equities in quantities of over a certain size, to predetermined and/or unidentified buyers. • Preemptive Rights Transactions A new ticker for trading of the preemptive rights attached to a share of a traded company when it increases capital is opened for trade with an extension of “. R” for a specified time period when the rights can be used.
Validity Periods of Orders • Day Order: A day order is the type of an order which can stay pending in the system only until the end of the session during which it was given. • Instant Order: This means that all or part of the order is executed immediately after it is brought to the system, and any remaining portions cancelled without being recorded as pending. • Good Till Date Order: This type of an order is kept in the system for matching until a certain date.
EMERGING COMPANIES MARKET • It was established as a distinct market within Borsa Istanbul to create a transparent and organized platform where securities, issued in order to raise funds from the capital markets by companies with growth and development potential, can be traded. • “Continuous Auction with Market Maker” method is used for trading while “Single Price” method is used for the equities without a market maker.
DEBT SECURITIES MARKET • Debt securities, securitized asset and income backed debt securities, lease certificates, liquidity bills issued by the Central Bank of the Republic of Turkey and other securities which are approved by Borsa Istanbul Board, which are denominated in TRY and foreign currency can be traded on the Debt Securities Market.
DEBT SECURITIES MARKET • Sub-Markets of the Debt Securities Market were launched on the following dates: • Outright Purchases and Sales Market; June 17, 1991. • Repo-Reverse Repo Market; February 17, 1993. • Offering Market for Qualified Investors; May 17, 2010. • Repo Market for Specified Securities; December 17, 2010. • Interbank Repo-Reverse Repo Market; January 7, 2011. • Equity Repo Market; December 7, 2012. • International Bonds Market; April 16, 2007 (conducted under Debt Securities Market since September 13, 2013)
DEBT SECURITIES MARKET • Outright Purchases and Sales Market (Kesin Alım-Satım Pazarı); Fixed income securities are traded on the Outright Purchases and Sales Market, which is an organized and transparent secondary market. • Repo-Reverse Repo Market (Repo- Ters Repo); Fixed income securities are sold with a re-purchase agreement (repo) and are bought with a re-sale agreement (reverse repo) in the Repo-Reverse Repo Market, which is one of the leading organized repo markets in the world.
DEBT SECURITIES MARKET • Interbank Repo-Reverse Repo Market; It was established to facilitate the repo-reverse repo transactions in organized market conditions, without having to meet the reserve requirement of the Central Bank, which is applied when a bank carries out repo transactions with a non-bank party. • Repo Market for Specified Securities; This Market provides the opportunity to realize repo transactions on specified debt securities within the organized market and then to deliver such securities to the buyer. It provides the means to exchange the security in a specified period, ensuring the flow of the securities between the forward and spot markets.
DEBT SECURITIES MARKET • Equity Repo Market; This market provides a means for carrying out repo transactions on company shares within an organized market framework. Shares acquired through repo transactions are delivered to the buyer for the duration of the contract. • Offering Market for Qualified Investors; It is the market where the debt securities of the issuers defined in the related CMB Communiqué are issued to “qualified investors” as defined in the capital markets legislation, in accordance with the regulations of the Capital Markets Board of Turkey. • International Bonds Market; Foreign Debt Securities (“Eurobonds”) issued by the Turkish Undersecretariat of Treasury and listed by Borsa Istanbul are traded in Internatioanal Bonds Market.
DERIVATIVES MARKET (VIOB) • The Main Board (Ana Pazar) is the main market where the orders are matched during the regular session and price fixing session. There are ten separate markets which are, Equity Options Main Board, Equity Futures Main Board, Equity Index Options Main Board, Equity Index Futures Main Board, Currency Options Main Board, Precious Metals Futures Main Board, Commodity Futures Main Board, Power Futures Main Board, Foreign Indices Futures Main Board • The underlying assets are some equities traded on Borsa Istanbul Equity Market and price indices, currencies, commodities and energy products selected on the basis of the criteria determined by Borsa Istanbul.
DERIVATIVES MARKET (VIOB) • Equity T. Garanti Bankası A. Ş GARANT. İş Bankası A. ŞISCTR, Akbank T. A. Ş. AKBNK, Türkiye Vakıflar Bankası T. A. O. VAKBN, Yapı ve Kredi Bankası A. Ş. YKBNK, Türk Hava Yolları A. O. THYAO, Ereğli Demir ve Çelik Fabrikaları T. A. Ş. EREGL, H. Ö. Sabancı Holding A. Ş. SAHOL, Turkcell İletişim Hizmetleri A. Ş. TCELL, Tüpraş Türkiye Petrol Rafinerileri A. Ş. TUPRS • Index BIST 30 Price Index. XU 030 • Currency Turkish Lira/ USDTRY/USDTurkish Lira/Euro. TRY/EUREuro/USDEUR/USD • Commodity Aegean Standard 1 Cotton Anatolian Red Hard Wheat • Precious Metals Pure Gold (TRY/gram) Pure Gold (USD/ounce) • Energy Base Load Electricity • Foreign Indices The Sarajevo Stock Exchange Index 10 SASX 10
PRECIOUS METALS AND DIAMOND MARKETS • In 1995 the Istanbul Gold Exchange (IGE) was opened (July 26, 1995) and authority to import gold was given to the members of the IGE in addition to the Central Bank. • Borsa Istanbul A. Ş. (the Exchange) was established on April 3, 2013 through the termination of the legal entities of Istanbul Gold Exchange and Istanbul Stock Exchange under the provisions of the Capital Market Law No. 6362. Now precious metals and diamond transactions are executed in the Precious Metals and Diamond Markets of Borsa Istanbul A. Ş.