Jolted by strong signals from the US Federal Reserve (Fed) for a hike in interest rates in its Dec. 16 meeting and escalated diplomatic tension between Russia and Turkey, foreign investors in the Turkish stock exchange, Borsa İstanbul (BİST), sold off $1.14 billion worth of stocks in November, the highest amount since June 2013.
Having recorded a short-lived rally immediately after the Justice and Development Party (AK Party) regained its parliamentary majority after a five-month hiatus on Nov. 1, assets at BİST dropped 5 percent in value for the whole month, during which the Fed deemed a rate hike more likely than before, attracting investors to assets in the US. Also, Turkey’s downing a Russian jet on Nov. 24 over a border breach at its Syrian border also unnerved investors, with BİST dropping more than 4 percent on the same day.
Foreign nationals made a net purchase of $2.58 billion in 2014, during which they bought $392 million worth of government bonds. This group of investors has sold $5.9 billion worth of government bond this year so far, of which $405 million were sold in November alone.
Quoted by the Hürriyet daily on Tuesday, Murat Barışık, a senior executive at the Ata Yatırım consulting firm, said November saw the greatest exodus from Turkey since the Fed’s announcement in June 2013, which triggered a capital exit from emerging markets.