Turkish stock buyers are again piling into new share offerings by companies, lured by the promise of jumbo returns as they clamor for ways to shield against resurgent inflation.
There’s been a string of IPOs that have been met with intense demand, with two in August drawing 2.6 million investors apiece, a record for any Turkish company. And given the backdrop of plentiful demand, 31 companies have come to market this year.
But also fueling the latest uplift in demand is a jump in the inflation rate to 47.8%, spurred by the lira’s sharp depreciation after elections in May. The surge in consumer prices is adding to the allure of equities as a way to offset erosion of the real value of savings as living costs rise. Meanwhile, the best-performing stock on the benchmark Borsa Istanbul 100 Index this year is electronic equipment maker Astor Transformator Enerji Turizm Insaat ve Petrol Sanayi Ticaret AS, up 972% since its debut in January.Among the most recent offerings, shares in power firm Izdemir Enerji Elektrik Uretim AS are up 46% since they began trading on Aug. 16. Utility Enerya Enerji AS is due to start trading on Aug. 23.
New listings are “juicy because their returns are at least 70%,” said Betul Seckin, 31, who has been investing in shares for the past 18 months as a way bring in extra income. “There’s almost no risk in betting on IPO stocks compared to others.”
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