Along with the pandemic, there was a flawless influx of stock markets with the effect of expansionary monetary policies all over the world. The most valuable story of the last two years in Turkey was the appetite of companies for IPOs and the great interest of personal investors in these IPOs.
To the news of Şebnem Turhan from Dünya newspaper, 30-60 and even 136 times demand came from individual investors for the public offerings. This heavy demand resulted in the successful outcome of the public offerings, and new companies joined the public offering frenzy to take advantage of this wind. Although the demand floors in the first quarter of 2022 decreased compared to 2021, it was again passed with demands changing in the middle of 1.5-12 times. However, in the last week, when the markets experienced sharp fluctuations, the demand of the personal investor in the IPOs was well below the planned collection.
YRCG Consulting Co-Founder Şeniz Yarcan stated that the individual investor received a great deal of demand in the announcements of the results of the public offering under normal conditions, and expressed that the individual investor had an incredibly sharp stance in the last two public offerings. Yarcan pointed out that this cannot be explained only by the difficulty of participating in large public offerings and emphasized that this is also an indicator of the investor’s trend towards shares.
Yarcan pointed out the low demand by stating that the rates were 0.49 in Sun Tekstil and 0.70 in Yayla Agro Gıda. Stating that brokerage houses have completed two public offerings by distributing this difference to other allocation clusters, Yarcan said that individual investors have shouldered all the public offerings in recent years, since there are no foreign investors left.
FOREIGN INVESTOR NO LONGER
Pointing out that companies are showing the risk of going public by relying on individual investors, Yarcan said, “There are no foreign investors anymore. In public offerings, foreign investors are the carrier power, they buy and carry. Average holding maturities are high. So are institutional investors. They do not trade, they buy the stock and move it. However, individual investors are traders. The time to hold the shares is very short and our stock market has the lowest rate in the world on this side,” he said. Yarcan emphasized that the fact that the market is very volatile and the days when the market is very volatile and there are many sales to developing countries during the pick-up days is also very effective in the demand of the individual investor, and said, “The individual investor sells his shares to enter the public offering. Because you have to enter the public offering by investing all the money. Last week was also a difficult day to sell shares. The falling stock market created a deterrent to sell shares,” he said. So, will it continue like this from now on? Yarcan pointed out that the last two public offerings contain very valuable lessons for issuers and pointed out that it is now risky to go public with confidence in individual investors. In addition to this, Yarcan said that the selection of intermediary institutions of companies that will go public is now much more valuable, and that intermediary institutions that have the skills to distribute the decrease in individual investor demand to other allocation clusters should be preferred.
WHAT YOU BUY THE DAYS OF SNOW ARE ENDING
YRCG Consulting Co-Founder Şeniz Yarcan stated that thanks to the post-pandemic expansionary monetary policies, there were days of easy money and profitable days, and that this has come to an end:
“In 2021, when we were talking about vaccines, the commercial life increased a lot, the growth was also reflected in the company balance sheets. When we came to this year, the only instrument that would give real interest was the stock market. This was very true for the first quarter, even for the first half. However, with high inflation, recession uncertainty and the great lack of foresight in the world, 2022 will be the year of conserving capital, not making money. The stock markets are starting to become risky, not giving a premium as before. Global economics, such as equations with 500 thousand unknowns. A stock is essentially a risky instrument. And in recent years, he has come to the stock market, which has come before him because it protects against inflation, the number of investors is increasing. Some will be upset, we are in the period when you need to think 5 times when investing in stocks. When choosing shares, companies with good stories and good financials should be chosen. But great care must be taken. Profit level should be determined for exit.”