The European Bank for Reconstruction and Development and Borsa Istanbul are joining forces to develop regional capital markets. To this end EBRD First Vice President Philip Bennett and Borsa Istanbul’s Chairman and CEO Ibrahim Turhan signed a Memorandum of Understanding today which sets out a framework of cooperation.
This includes potential joint investments in stock exchanges and related capital markets infrastructure along with technical assistance in countries where the EBRD invests. The cooperation will particularly focus on the Western Balkans, Central Asia and the southern and eastern Mediterranean.
The joint efforts are expected to strengthen the development of local and regional capital markets which will also boost the role of Borsa Istanbul beyond Turkey and underpin the city’s role as a financial centre and a regional business and investment hub for the wider region.
“This Memorandum of Understanding is an important step that provides us with an opportunity to explore, together with Borsa Istanbul, ways to develop and support capital markets and stock exchanges in smaller economies of our region,” said EBRD First Vice President Bennett at the signing in Istanbul, currently hosting the 2013 EBRD Annual Meeting and Business Forum. “Closer regional integration will improve capital markets, create more transparency and ultimately attract investors’ interest and liquidity.”
İbrahim M. Turhan, Chairman and CEO of Borsa İstanbul said: “Borsa İstanbul is one of the most liquid and fastest-growing markets in its region and maintains close relationships with stock exchanges of the area. We are very glad to sign this MoU with the EBRD which will provide opportunities for further development of the capital markets infrastructure in the region and to share our knowledge and expertise with these markets.”
Turkish enterprises are among the leading investors in the EBRD region. As at the end of March 2013, the value of joint Turkey-EBRD investment stood at €4.3 billion, of which the EBRD’s portion was €1.9 billion and Turkey’s was €2.4 billion. Adding in further investment from other sources, the total value of projects with Turkey-EBRD involvement was €8.0 billion.
Since the beginning of its operations in Turkey in 2009, the EBRD has invested over €2.5 billion in the country, both in direct deals and through credit lines. Last year Turkey became the EBRD’s second-largest country of operations with €1.0 billion in new investments in 2012 alone.