Companies increase share buybacks following fund crisis on Borsa Istanbul
Following the liquidity crisis in investment funds and sharp declines, companies and partners on Borsa Istanbul have accelerated share buyback programs.
Following the fund crisis and sharp valuation losses on Borsa Istanbul, companies and partners have stepped up share buyback programs to heal wounds. Share buybacks executed on Friday alone exceeded 3.8 billion liras, while the total weekly volume approached 5 billion liras.
Sharp Declines in the Market
While the liquidity crisis in investment funds shook Borsa Istanbul, the BIST 100 index closed the week with an 8.18 percent loss. The overwhelming majority of publicly traded companies finished the week with declines, affecting thousands of investors.
Margin calls reached high levels during the peak of the crisis before receding. Certain company stocks in fund portfolios hit the floor price every day, and significant value losses were recorded across the board.
Company Share Buybacks
Aiming to balance the volatility in the market, companies and partners announced consecutive buyback moves via the Public Disclosure Platform (KAP). Dozens of companies bought back their own shares in a single day, providing significant financial support to the market.
Last week, a total of 91 companies carried out share buybacks, with the total amount of these purchases reaching billions of liras, highlighting corporate efforts to support the market.
New Buyback Programs
Many large companies and holding groups announced new buyback programs in an attempt to restore confidence in the market. Leading firms from various sectors announced new programs worth billions of liras.
The Banking Regulation and Supervision Agency (BDDK) also supported this process by publicly sharing its decision to provide flexibility in share buybacks for banks.
Cash Outflows in Investment Funds
The crisis caused cash outflows from investment funds to accelerate and fund sizes to decline. Numerous funds faced net cash outflows.
While the total market value of investment funds decreased by billions of liras within a certain period, official data recorded money outflows from a large number of funds.