Turkey’s Capital Markets Board Changes Key Stock Index Calculation
Turkey' s Capital Markets Board (SPK) has announced a significant adjustment to the methodology for calculating the proportion of freely traded shares in the market, known as " free float". This fundamental parameter is used in constructing Turkey' s most followed stock indices, including the BIST 30 and BIST 100.
The change means certain shareholdings will now be excluded from the free float rate determination, potentially leading to a re-evaluation of companies' weight in these indices.
This regulatory adjustment carries significant implications for the Turkish stock market. Companies with large blocks of shares now excluded from the free float calculation may see their influence and weighting in the BIST 30 and BIST 100 indices reduced. Consequently, index funds and other investment products tracking these leading Turkish indices will need to rebalance their portfolios according to the SPK' s new methodology, requiring investors to understand the revised criteria for informed investment decisions.
Such adjustments are typically made to enhance the accuracy and relevance of indices. By excluding shareholdings that are rarely traded or locked for strategic reasons, the SPK aims to ensure the indices better represent the liquid and accessible portion of the market.
This move seeks to increase transparency and efficiency in the Turkish capital market, potentially strengthening investor confidence and aligning the financial system with international standards for market stability.
Source: Bloomberght
