Borsa Istanbul, usually written BIST, is Turkey's stock exchange and the home of its listed banks, industrial groups, airlines, retailers and holding companies. The Capital Markets Board of Turkey, known by its Turkish initials SPK, regulates the market. Shares are priced in Turkish lira (TRY). The main benchmark is the BIST 100.
This guide explains how an investor buys shares in Turkey, where the main risks sit and what to ask before you commit money. It is general information, not advice on any share. Rules, tax rates and market conditions change, so confirm the current position with a licensed intermediary and a tax adviser.
How a purchase works
Turkish shares are bought through an intermediary institution that is authorised by the SPK and is a member of the exchange. These are usually banks' brokerage arms and independent brokerage houses. Ownership is recorded electronically at the Central Registry Agency, known as MKK, and trades are cleared and settled through Takasbank. You will not hold paper certificates.
Step 1: choose an intermediary
Compare these points:
- Authorisation. Check that the firm is on the SPK's list of authorised intermediaries.
- Costs. Commission is usually a percentage of the order with a minimum, and may be negotiable for larger accounts.
- Platform. Most firms offer a web and mobile app. If you do not read Turkish, check that the app and the contract are available in a language you understand.
- Other products. Some firms also offer funds, futures and foreign markets. These carry different risks, so keep them separate from your plain share purchases.
- Protection. Ask how client assets are kept apart from the firm's own.
Step 2: open and fund the account
Turkish residents open an account with an identity document and tax number. Foreign investors are normally asked for a passport, proof of address, a tax identification number from their country, and often a local tax number or a representative arrangement. The process can take longer for non-residents, so ask for the list of documents first. See foreign investor rules for the questions to ask.
If you are sending money from abroad, find out how and at what rate it is converted into lira, and whether you can hold proceeds in another currency or transfer them out.
Step 3: place an order
Use a limit order for shares that do not trade much. For the big, active shares a market order usually fills close to the last price. Borsa Istanbul also has rules that limit how far a share price can move in one day, and trading can be paused for a share after a very large move, so a price may not reach the level you expect in one session.
Follow live and end-of-day prices, gainers and losers on Turkish stocks.
The lira, inflation and your return
This is the most important risk. The lira has lost value against major currencies over many years, and Turkey has had periods of high inflation. Share prices in lira can rise strongly in nominal terms while the real value, or the value in dollars or euros, falls or stays flat. For a foreign investor, the return in your own currency is the lira share return plus the currency move, and the currency move has often been negative.
Do not judge a Turkish share on its lira chart alone. Compare it with inflation and with the lira's move against the dollar or euro over the same period. Currency risk for foreign stocks shows how to do the comparison.
Other risks
- Policy and rate changes. Decisions about interest rates and capital flows can move the market quickly.
- Concentration. Banks and large holding companies make up a big share of the main index.
- Liquidity. Many smaller shares trade little.
- Rules for foreigners and for short selling have changed over time. Check what applies on the day you invest.
- Classification. Turkey is treated as an emerging market by most index providers. See emerging vs developed markets.
Costs and tax
Expect brokerage commission and exchange and registry charges. Turkey applies tax rules to dividends and to trading gains, and the treatment can differ for residents and for non-residents, and by holding period or type of holder. The rates have been changed more than once, so ask a tax adviser rather than rely on a general guide. See tax on foreign stock gains.
A worked example
You invest 50,000 lira in a share priced at 25 lira, so you buy 2,000 shares. If costs are 0.3 percent, about 150 lira, you pay 50,150. After a year the share is at 35 lira, worth 70,000, a rise of 40 percent in lira. If prices in the economy rose by 45 percent over the same year, your holding has lost real purchasing power despite the nominal gain. Measured in a stronger currency, the result could be worse again if the lira fell. The numbers are an illustration, not a forecast.
Checklist before you invest
- Confirm the intermediary is SPK-authorised.
- Work out all costs for buying and selling.
- Check the share's volume, and use a limit order if it is low.
- Compare the lira return with inflation and with your home currency.
- Check what rules and taxes apply to you as a resident or a foreigner.
- Keep contract notes and statements for tax.
This guide is for general information, not financial advice. See the disclaimer.