The world champion stock market is immune from economic crises and inflation.
There are some stocks that experienced a correction even though the country was in an economic crisis.
Stocks are an investment instrument that is quite popular and has many enthusiasts.
It’s just that the condition of an issuer’s shares is certainly not always in good condition.
As is the case today, the stock market is volatile.
The majority of the global benchmark stock indexes experienced a correction throughout the year.
However, this is not the case for all stocks.
Like the Turkish stock index, even though the country’s condition is being hit by an economic crisis.
It can be concluded if the company is included in the champion stock exchange.
Turkey Becomes Immune World Stock Exchange Champion
Turkey’s benchmark stock index is still in good shape.
Whereas Turkish shares BIST 100 experienced an increase with a record number that shot up to 30.1%.
This happens all year round.
So it can be ascertained that the stock index has the best performance in the world.
In fact, at the same time, Turkey is in the midst of an economic crisis and high inflation.
In June 2022, the Turkish stock index increased by 78.62% yoy.
Even being a G20 country with a high inflation rate.
Although inflation continues to increase, Turkey’s central bank is reluctant to raise its benchmark interest rate.
This condition is because the monetary authority does not have independence.
Moreover, Recep Tayyip Erdogan as a president who is anti-high interest rates caused the lira to plummet.
The lira has weakened considerably by up to 30% so far this year.
Increase in Government Bonds
Turkish stock index became the world’s champion stock exchange this year.
Although the economic crisis and high inflation did not affect his condition.
However, due to the absence of an increase in interest rates, the lira weakened.
One of the factors that led to the stock market rally was the increase in state bonds.
Although inflation rose quite high, the price of debt securities rose until the yield decreased.
So far this year Turkey’s sovereign bonds fell 519 basis points.
This decline was due to the central bank’s policy which provided rules for banks to buy government bonds.
When the price goes up, the yield will go down.
Debt securities are one of the instruments that are quite interesting.
This is because debt securities have minimal risk.
In addition, government bonds tend to be risk free, theoretically, making the stock market a world champion.
When yields decline, investment in fixed income instruments becomes less promising.
This makes investors choose other riskier assets to maximize profits.
So that stocks become one of the right instruments of choice.
The increase in the price of Turkish debt makes the stock market not actually have more function.
This happened due to policy intervention and Turkey became the world’s champion stock market even though the country was experiencing a crisis.