Saturday, 11 December 2010

25 sene, buyuk kazanclar ve kayiplar: IMKB ve bireysel yerli yatirimcilar

IMKB Aralik 1985 yilinda acildi. Acilisin modu Ankaradaki politikacilarin finansal serbestlige yonelik bir sembolik hareket daha yapma konusundaki kararliliklari sebebiyle biraz tepeden inme ve sallapati oldu. Hisse senedi sahipligi Istanbuldaki araci kurumlarin ve bagimsiz hisse simsarlarinin kurdugu tezgah ustu piyasaya ragmen topluma mal olmus bir yatirim sekli degildi. Aslinda su ana kadar boyle bir duruma gelmeyi de basaramadi. Pisayada yabancilar diye bilinen ve 1989'dan beri IMKB'ye yatirim yapan uluslararasi kurumsal yatirimcilar son 5 6 senede IMKB’nin piyasa degerinin yuzde 60 ve daha fazlasini ele gecirdiler.

Competition and Change Aralık 2010 sayisinda yayinladigim makalede IMKB’nin tarihini 1985’e kadar getirip yerli bireysel yatirimci karakterinin son 25 senede yasadigi degisimleri tartisiyorum. Bu tartismanin amaci yerli bireysel tasarruf sahiplerinin borsa yatirimina neden soguk baktigina bir cevap bulabilmek. Bunu yaparken 25 senelik tarihi IMKB’nin yasadigi iki kuresellesme dalgasina boluyorum. Birinci dalga acilistan 2001 krizine kadar olan, yuksek faiz yuksek enflasyon ve Erturk (2003)’ un kupon kapitalism diye adlandirdigi donem. Ikinci donem ise 2001 krizi sonrasi yapisal reformlarin meyvesini verdigi ve Turkiye’nin “yapisal saglikli” ekonomi donemine gecisinin devam ettigi donem. Bu donemleri islerken bireysel yerli yatirimcilarin nasil bir macro ve micro piyasa kosullarinda yatirim yapmayi ogrendigini gostermeye calisiyorum. Bunu yaptiktan sonra yerli bireysel yatirimcilara hizmet veren dort araci kurumdan piyasalari anlamlandirma ve yatirim kararlari alma faaliyetleri uzerine deliller sunuyorum. Araci kurumlarla ile ilgili bolum 2008 ve 2009’dan, yani buyuk cokus ve toparlanma doneminden geliyor. Makalenin IMKB’nin 25. yili kutlamalarina denk gelmesi benim icin hos bir tesaduf oldu.

Makalemde piyasa sosyoloji bakimindan temel argumanim su: Piyasalar rekabetin ve catismalarin yasandigi cok-yuzlu kurumlar. Piyasalari modern finans teorisinde savunuldugu gibi rasyonel, isbirlikci ve cogu iyi niyetli insanlarin toplamindan olusan seyler olarak goremeyiz. Eger kanun koyucular ve uygulayacilar piyasalari ikinci sekilde gormekte israr eder ve daha zayif olan gruplarin guveni kazanmakta basarisiz olur, onlari firsatci araci kurumlarin, sirket sahiplerinin, bireysel spekulatorlerin eline birakirsa, zayif gruplarin taklit yoluyla bu gruplar gibi firsatci ve kisa vadeci olmalari sasirtici olmasa gerek. Tabi bunun daha kotu bir sonucu da bireysel yatirimcilarin piyasaya yatirdiklari servetleri kaybetmeleri ve piyasan bir daha geri donmemek uzere ayrilmalari. Ne yazik ki 1990li yillarda bu olumsuz durum bircok bireysel yatirimci icin gercek oldu. Fakat bu uzucu gerceklikte daha fazla onemli olan sebep ulkeyi yuksek enflasyon ve butce aciklariyla yoneten populist politikacilardi.

2000 sonrasi Turk ekonomisinin, siyasetinin ve ona paralel olarak araci kurum sektorunun yasadigi buyuk bir degisim var. Bu degisim bir bakima kuresel finans sermayesinin tesvikiyle gerceklesti. Bu degisime ragmen bireysel yatirimcilar borsa yatirimlarinda hala firsatci ve kisa vadeli bir bakis acisina sahipler. Buradaki en onemli degisim ise bireysel yatirimcinin artik piyasalar hakkinda daha bilgili olmasi. Bunda kuresel ve Turkiye piyasalarinda yasanan dijital devrimin de buyuk payi var. SPK’nin ve IMKB’nin son bir kac senede yaptigi piyasa reformlari, ve bireysel yatirimcilar arasinda egitim ve guven kazanma kampanyalari sayesinde belki IMKB’nin 50 yilinda bambaska bir piyasa ile yasayacagiz.


Makalenin ingilizce ozeti asagidaki adresten gorunebilir
http://www.ingentaconnect.com/content/maney/com/2010/00000014/F0020003/art00011

Not: Bu calismada bana yardimci olan, zamanlarini benle paylasan Istanbuldaki tum piyasa calisanlarina ve yatirimcilara tesekkurler. Bu makale onlara adanmistir!

Wednesday, 8 December 2010

A Quarter century of learning by great rewards and losses-Turkish retail investors in the Istanbul Stock Exchange

The ISE was opened in December 1985 in a rather haphazard manner with the command of the politicians in Ankara to make yet another token for their policy of financial deregulation. Although there was an OTC market in Istanbul populated by banks and independent brokers, share ownership was not a mass population phenomenon. In fact, so far it has never managed to become so. Foreign institutional investors known as "foreigners" in market parlance, have bought up more than 60 per cent of the portfolio value in the market in recent years.

In my new article, which is published in Competition and Change December 2010 issue, I trace the ISE's history back to 1985 and discuss the evolution of the Domestic Retail Investor figure over two and a half decades to find an answer to why Turkish household savers are not very enthusiastic about stock market investment. I then present evidence on the sense-making and investment activities from four brokerage houses which serve retail investors. The evidence is from 2008 and 2009, the crush and the recovery years of global financial markets. It is also a nice coincidence that this article is published when the ISE is celebrating its 25th year in operation.

My argument in the article is simply this, markets are multifaceted institutions of competition and conflict and they are not the aggregate of rational, cooperative and nice individuals as it seems to be espoused in modern finance theory. If one ignores this aspect and fails to win the trust of less powerful groups (domestic retail investor in the case of the ISE) and leaves them in the hands of opportunistic intermediaries, company owners, self-made domestic speculators and so on, then it is not surprising that retail investors in the ISE evolve into opportunistic and short-termist participants in the market or worse lose their fortunes and leave the market for good. This was unfortunately the case in the 1990s for many domestic retail investors in the ISE. But a more powerful factor in this evolution was the populist politicians of the 1990s who ran the Turkish economy on high budget deficits and high inflation in order to finance their unsustainable populist policies. Despite the great transformation in brokerage sector and the Turkish economy and politics in the new millennium, both if which were partially sanctioned by the global finance capital, the retail investor figure is still short-termist and opportunistic, like they used to be in the 1990s, but with a more informed perception frame about the markets thanks to the digital revolution in the global and Turkish financial markets. Maybe with more public campaigns and micro-market reforms for education and trust building among retail investors as it is now done by the ISE and the Capital Markets Board, we will have a totally new ISE in its half centenary in 2035!

article's abstract available here
http://www.ingentaconnect.com/content/maney/com/2010/00000014/F0020003/art00011

PS: Many thanks to all my informants in Istanbul. This article is dedicated to them.

Sunday, 18 July 2010

Sources and consequences of structural incoherence in financial markets

(to be published in LSE SU Finance Society Magazine 'The Analyst')

We can highlight three important insights sociological studies bring from financial markets. The first is the importance of social relationships (networks) in sensemaking and price-discovery, which undermines the notion of rational unitary actors capable of collecting and processing data/information on their own (Baker, 1984). The second is the demonstration of origins and effects of social and organisational action that are not necessarily utility maximizing by looking at the role of beliefs and culture pertinent to distinctive groups in financial markets (Abolafia, 1996). Related to this is the insight on how markets and politics interact in shaping markets' legal and cultural foundations and social actions that take place in markets (Fligstein, 2002). The third insight is the demonstration of human and non-human actor interaction which includes application of theories and technology to market exchange, and how these transform cognition, calculation and price-discovery activities in financial markets (Millo and Mackenzie, 2003; Mackenzie 2009). In all the three insights that are mentioned here, there is one common theme, namely reduction of uncertainty concerned with; firstly rights and obligations attached to securities and actors that participate in the issuance and exchange of securities; secondly the social value and legitimacy attached to these essential processes and markets in general; and finally subjective judgements about financial value of securities in relation to risks and returns.

In reference to the third insight, recent research on financial markets demonstrate the growing importance of digital representation and calculation technologies which have undermined the network based and face to face relationships in financial markets (Cetina, 2005; Cetina and Preda 2007). In this new environment, flows of funds and information presented on information and trading screens become text-like representations of aggregate market sentiment which market actors read, classify, interpret and contribute to with their trading actions. In this respect, market actors develop market knowledge via observation of market screens rather than by being in a market place physically. The latter in fact had been a privilege for select few market professionals before the digital revolution. The digital revolution can therefore be argued to have brought a new wave of disintermediation to financial markets and enabled lay investors and smaller investment organisations to be more self-reliant in their observation and trading activities in markets.

The digitization of market places and the automation of trading have therefore transformed the ways in which market actors orient themselves to other market actors. More importantly, they have brought a more democratic access for professionals and public alike to information/data and markets. The improvements in access  however does not necessarily bring an uniformity among market actors in their comprehension and interpretation of market screens. As the nature of representation on market screens are now very much dominated by summary proxy figures on anonymised actors, and risks and returns on financial securities, market actors find themselves in a position to having to decode these figures to be able to gauge the direction of markets and the value of their investments. In that process, one's market identity and epistemic, social and economic resources often become the determining factors in how the decoding is performed and results in trading decisions.

Irrespective of the effects of digitization on the generation and coherence of meanings in digitized financial markets, sociological studies on financial markets have pointed to the origins and consequences of different interpretations in markets in the form of conflicting valuation models on securities (Beunza and Garud 2007) or worse, categorical discounts or total avoidance of securities (Zuckerman 1999) which seem not to fit the prevalent perception frames or knowledge standards in distinctive pockets of a market place (White 2000). The main source behind these structural differences in meanings are the multiple roles actors and entities take on, and the understandings of actors about other actors' and entities' roles and functions in the market place. Within a market, one can therefore talk of a division in terms of not only the concrete functions an actor or entity fulfills but also the perceptions that are held by actors about other actors and entities. Although one would assume that over time there should be a convergence between fact and perception as social order is based on the consensus among actors over meanings attached to actions and entities, financial markets undermine such a need for consensus over meanings, especially about the aspects of market which are not directly concerned with the foundational rules, regulations and mores that are necessary to solve the [social] value, cooperation, and competition problems in markets (Beckert 2009). In that sense, price of a security at any point in time need not reflect consensus about the 'right price' in relation to financial risks and returns among different actors for it to be realized and used as a signifier for the exchange of securities. This is despite the fact that there needs to be a consensus about the legitimacy of price discovery mechanisms in a market for it to be perceived as orderly, stable and fair to all the participating parties irrespective of their market identities.

We can therefore identify two planes of order in financial markets. The primary plane of order is comprised of the ground rules and norms about what constitutes a security, how it can be exchanged in a given market, the rights and obligations attached to owning a security, who can own it, who can issue it, and so on. The primary plane gives purpose and role to the constituting elements of a market. It draws the boundaries of competition and cooperation among the participating actors in that market. The secondary plane accommodates the actual practices by market actors as they are informed by the first plane and the theoretical or vernacular constructs about financial valuation. However, the knowledge and value outcomes generated in the second plane may not necessarily conform to the categorical or a priori facts generated in the first plane. Simply put, shares of company A despite being categorically the same entity in the first plane, namely a security that allows investors to become shareholders in a company, may not take on the same meaning in relation to the subjective financial valuations and/or reappraisal of their social worth and legitimacy by different market actors who have distinctive market roles and identities. Consequently, the actual financial and social value and legitimacy evaluations of various market actors may undermine the legitimacy and social value of a given security and nullify a priori truth claims that are made about it. Similar mismatches between a priori truth claims about other components of a market and a posteriori perceptions held by different market participants and the public are probable and prone to create a structural incoherence in the meanings attached to markets and their components. This probability has been exacerbated by the democratisation of access to market data/information and knowledge, which has diluted the network-based and restricted mode of presence in market places. Therefore both planes of social order in a financial market are closely connected to each other in a spectrum of mutually constituting to mutually undermining relationships. The dynamism created by the multitude of actors and entities with diverse social and market identities in constant market interaction leads to reappraisals of a priori and a posteriori claims on securities and markets, and provides the internal and external stimuli for reform and change in financial markets.

References

ABOLAFIA, M. (1996) Making Markets. Opportunism and Restraint on Wall Street. Cambridge, MA: Harvard University Press.

BAKER, W. (1984) ‘The Social Structure of a National Securities Market,’ American Journal of Sociology, Vol. 89, No 4, pp. 775-811.

BECKERT, J. (2009) 'The Social Order of Markets,' Theory and Society, Vol. 38, No. 3, pp. 245-269

BEUNZA, D. and R. Garud (2007) ‘Calculators, Lemmings or Frame-Makers? The Intermediary Role of Securities Analysts,’ Sociological Review, Vol. 55, No.2, pp. 13-39.

CETINA, K.K. (2005) ‘How Are Global Markets Global? The Architecture of a Flow World,’ in K.K. Cetina & A. Preda (editors), The Sociology of Financial Markets. Oxford: Oxford University Press.

CETINA, K.K. and Preda, A. (2007), ‘The Temporalisation of Financial Markets: From Network to Flow,’ Theory, Culture, and Society, Vol. 24, No 7–8, pp. 116–138.

FLIGSTEIN, N. (2002) The Architecture of Markets. Princeton: Princeton University Press.

MACKENZIE D. and Y. Millo (2003) ‘Negotiating a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange,’ American Journal of Sociology, Vol. 109, No. 1, pp. 107-145.

MACKENZIE, D. (2009) Material Markets: How Economic Agents are Constructed. Oxford: Oxford University Press.

WHITE, H (2000) “Modeling Discourse in and around Markets,' Poetics, Vol. 27, No. 2, pp. 117-133

ZUCKERMAN, E. (1999) 'The Categorical Imperative: Securities Analysts and the Illegitimacy Discount,' American Journal of Sociology, Vol. 104, No. 5, pp. 1398-1438