By Gokhan Kurtaran
ANKARA
Developing Borsa Istanbul is an important component of building the Istanbul financial hub, European Bank for Reconstruction and Development Director for Turkey Jean-Patrick Marquet told Anadolu Agency in an interview on Friday.
On May 29, The European Bank for Reconstruction and Development (EBRD) has entered exclusive negotiations to acquire a 10 percent stake in Borsa Istanbul. Borsa Istanbul is currently majority-owned by the Turkish government. It is the only stock exchange in Turkey. The deal is subject to regulatory approval.
"Borsa Istanbul project is important for us. It’s important for two reasons, one Turkey wants to build Istanbul as a financial hub, and developing the exchange is very important component of that objective," Marquet said. "The second objective is that we are getting into equity investments, usually in unlisted in Turkish corporates; we need an exit strategy for the developing markets, thus developing (relations with Borsa Istanbul) is an important objective for us. We have signed a commercial agreement with Borsa Istanbul, and now we will need the regulatory approval. Hopefully the investment will be finalized in the course of the third quarter. It’s subject to regulatory approval."
Borsa Istanbul has already partnerships with foreign exchanges like Nasdaq with various exchanges in Central Asia. "One of the contributions would be building these relationships, and we have previously invested in the Moscow Stock Exchange, Bucharest Stock Exchanges, so we know how to establish partnerships and how to grow," Marquet said.
"Investing in equity in exchanges and in Turkish corporates will attract more interest, and will help to improve access to equity for Turkish companies," he added.
Marquet said that he expected Turkey to continue to rank first in the EBRD investment portfolio. "Last year we invested €1.4 billion ($1.57 billion) in Turkey, and this year, our plan is to invest €1.75 billion ($1.96 billion). We expect to continue at a similar number in years to come. So that would make Turkey the largest recipient of the EBRD. We have very diverse investments in the country: In energy, the corporate sector, working with the Turkish banks to finance SME’s, in capital markets like Borsa Istanbul so we have a very broad base
We are open to expanding our partnership in general. Borsa Istanbul, the next objective, is, I understand, is to list on its own exchange and that should take place 2016, so we expect energy to be very much focused on that pretty short-term objective. At this point, this is where we are, but of course we are open," Marquet added.
Marquet said that EBRD has received some guidance from its shareholders in 2014 that they were not prepared to make further investments in Russia. From the middle of last year, the EBRD has not had new projects in Russia.
"That guidance is still currently valid. I don't know if that could change in the future. In any case, Turkey for us is a standalone player, we have started to grow in Turkey way before the events around Russia. Last year it became the largest recipient, this year we continue to invest. The situation and investment in Turkey is not a function of what we are doing or not doing in Russia. Turkey is very important country of operations."
