In Borsa Istanbul, the assets of small investors are eroding against inflation.

27.02.2025 11:31

In Borsa Istanbul, the assets of small investors continue to lose value against inflation. Economic uncertainties and high inflation rates threaten the financial security of investors. In addition to the sideways movement experienced over the past year, even the losses from last week have not yet been recovered.

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The sharp sell-offs that occurred on February 21 at Borsa Istanbul shocked nearly 6 million 800 thousand small investors. The BIST 100 index reached 9,400 points. The loss reached 3% in just one day. However, when the inflation loss is added, the damage is increasingly growing for small investors who have been waiting for a long time in stocks.

WHAT HAD HAPPENED?

On February 21, the BIST 100 index closed the day down 2.09%, finishing at 9,602.16 points. The banking index lost 1.74%, while the holding index lost 1.18%. Following this development, the Capital Markets Board (CMB) announced that an investigation had been initiated regarding the extraordinary price movements in the BIST equity market.

In a written statement made by the CMB, it was stated, "Additionally, our Board has immediately initiated the necessary legal actions/investigations against those who make intentional and misleading news that cause unusual price and volume movements, as well as those who disseminate this news."

ARE SMALL INVESTORS VICTIMS OF ROBOTS?

For months, small investors have been stating in their social media posts that they are victims of robots used by large investors. They note that robots that trade with order prices execute large volumes of buy and sell transactions in a short time, providing profits to their investors, while small investors try to maintain their expectations with long-term investment advice. However, they point out that these expectations have been gradually eroded in the face of stocks that have not moved in the past year. Indeed, when the inflation difference is taken into account, a stock purchased a year ago with the same numerical value can result in losses of up to 57% in today's financial value.

STOCKS ARE FALLING IN DOLLAR TERMS

Another reason for investors to incur losses in a high inflation environment is the position of stocks against the dollar. It appears that the dollar-based value of some of Turkey's leading companies has gone back to 2007, while some have even returned to the year 2000. In this scenario, it is possible to say that the 25 years of effort by investors has essentially become worthless.

INDEXES FALLING BY 0.5%, STOCKS FALLING BY 4%

There is also a significant divergence between stocks and the BIST 30 and BIST 100 indexes. In situations like the drop that occurred on Friday, February 21, parallel declines can be experienced between the stock index and the market. However, in similar scenarios over the past year, while the BIST 100 index has made a correction of 0.5%, many other boards have seen a corresponding decline of 4%.

WHY CAN'T BORSA ISTANBUL RECOVER?

While the high inflation wave that started during the coronavirus pandemic has affected the entire world, global stock markets have gradually recovered over the past four years. While the American Nasdaq, German Dax, and British FTSE have slowly mitigated their losses, the expected bounce at Borsa Istanbul has not materialized. The partial recovery movements experienced on a stock basis have not provided the expected rise in the Borsa Istanbul index.

FOREIGN INVESTORS ARE BEING SOUGHT

The sharp movements at Borsa Istanbul, which mostly occur against small investors, are causing losses to accumulate in an environment where foreign investors are also absent. Especially, European stock markets have been rising uninterrupted for 9 weeks. In contrast, the stagnation of Borsa Istanbul is causing investments to erode against inflation.