Turkey's Borsa Istanbul stock exchange plans to sell around 40 percent of its share capital next year via an initial public offering (IPO), its chief executive officer said on Tuesday. "Next year we will have an IPO and become a public company in 2017," Tuncay Dinc told the World Exchange Congress in London. Dinc had said last September that earlier plans for an IPO in 2016 would likely be derailed by low market valuations.
The ratio of shares allocated for the IPO is expected to be around 42.75 percent, corresponding to the Turkish government's majority stakeholding. Dinc declined to give an estimate of the stake's potential value. Borsa Istanbul was created in 2013 by combining the former Istanbul Stock Exchange, the Istanbul Gold Exchange and the Derivatives Exchange of Turkey. The European Bank for Reconstruction and Development last year acquired a 10 percent stake in the exchange.
Nasdaq OMX Group also holds around 7 percent through a December 2013 tie-up. Istanbul wants to become a financial hub spanning Central Asia, south-eastern Europe and North Africa, and Borsa Istanbul has taken equity stakes in the Kyrgyz, Montenegro, Baku and Sarajevo Stock Exchanges. Last October it signed a memorandum of understanding with the Tehran Stock Exchange, providing for the exchange of information and potential dual-listing opportunities.
"We are trying to help other countries in the region to develop their capital markets," Dinc told Reuters. "It's to our benefit to have exchanges in neighbouring countries with developed capital infrastructure. That's why we went to Iran." Dinc said Borsa Istanbul had agreed to support the establishment of a fund in Turkey giving access to investments in Iran. There are also plans to develop new products for the derivatives market. "We want to develop products for commodities with physical deliveries," he said. "We have started with wheat and we will continue with cotton, corn and barley."
He added that there were some big IPOs in the pipeline for 2016-17, without giving any examples. Turkish conglomerate Sabanci Holding said in February that it wants to hold an IPO of its energy company and a secondary float of shares in its retail unit. Football team Fenerbahce Futbol and satellite communications firm Turksat have also said they are preparing for share listings.