65% drop in the initial public offering index on Borsa İstanbul and the risk of 11,000 points

While it was reported that the initial public offering index on Borsa İstanbul has lost approximately 65% of its value since September 16, Dr. Nuri Sevgen stated that there is a risk of a sharp decline towards the 11,000 point level in the BIST 100 index.

Declines in the Initial Public Offering Index and BIST

Evaluating the sharp sales wave and uncertainties in the market on Borsa İstanbul, Dr. Nuri Sevgen stated that the IPO index lost nearly 65% of its value in a period of about one month since September 16. It was noted that when the BIST 100 index is excluded, the remaining index comprising all other companies experienced a drop of around 50%, while the decline in the BIST 100 index materialized at approximately 30%.

Dr. Sevgen conveyed that reports regarding the departure of Capital Markets Board (SPK) Chairman Mahmut Sütçü and Deputy Minister of Treasury and Finance Osman Çelik increased the perception of uncertainty in the market and accelerated the sales.

Global Developments and Technical Analysis

Emphasizing that the picture in external markets is also negative alongside domestic uncertainties, Sevgen reported that oil prices rose to $111 per barrel following news of an attack on the port in the Kunarek region of Iran and stabilized around the $110 level. Additionally, it was stated that despite the initial public offering of the artificial intelligence company Elis in the South Korean stock exchange gathering over 400 times demand, losing 30% of its value on its first trading day created fear in technology stocks.

Touching upon the technical outlook of the BIST 100 index, Sevgen warned that an inverted pennant formation has formed at the 11,900 - 12,000 point levels, and with this formation breaking downwards, there is a risk of a sharp decline towards the 11,000 point level in the BIST 100.

Balance Sheet Period, Trading Volumes, and the Element of Trust

Stating that profits will not come very strong in the upcoming third-quarter balance sheet period, Sevgen emphasized that the focus should not be on net profit figures, that stock prices have become cheap, and that companies' market values on the exchange have dropped below their book values. It was conveyed that due to trading volumes falling sharply, layoffs and branch closures have begun at brokerage houses, and high-frequency algorithms accelerated the decline by canceling passive buy orders during heavy sales coming at narrow price steps.

Stating as an evaluation that a free fall is being experienced in the market, Sevgen emphasized that for stocks to rebalance and enter an upward trend, buyers must return to the market, and the sole key to this is establishing full trust in the markets.