This year marks an important milestone in the history of Turkish capital markets—the 150th anniversary of the establishment of stock exchanges in Türkiye. While Borsa Istanbul is celebrating this momentous year, a major transformation is taking place in Turkish capital markets.
Since 2020, the number of retail investors in Türkiye has surged from 1.2 million to nearly 8 million. Türkiye boasts a youthful population, and Turkish capital markets provide immense potential for the new dynamic generation. Now, young people are more interested in investing in capital markets. Over the last decade, the number of young investors aged 15-29 in the stock market has increased by a remarkable 19 percentage points. In the past year alone, there has been an approximate 10-point increase, bringing the share of young investors to 25.7 percent. The number of young investors has witnessed exponential growth, surging from 375,000 in 2021 to an impressive 1.6 million in August 2023 – the latter represents a 288 percent annual increase. Not only has the number of young investors soared, but the total portfolio value held by these investors has also witnessed substantial growth. In August 2023, the total portfolio value held by young investors surged by a remarkable 254 percent in dollar terms compared to the same month the previous year, reaching $2.8 billion.
While this rapid rise in retail investors, especially among the young, signifies amplified participation in the market, it also brings investor protection, financial literacy and capital-market literacy to the top of the agenda.
Emphasis on Capital-Market Literacy and the BISTLAB Project
Capital-market literacy takes financial literacy a step further by providing an understanding of how capital markets function. This enables individuals to access a wide range of investment opportunities, from stocks and bonds to more complex financial instruments like derivatives. In this sense, capital-market literacy goes hand-in-hand with risk management. Understanding the risks associated with different investments and strategies helps individuals make relevant choices and select the instruments that align with their personal risk tolerance and financial goals.
Financial and capital-market literacy are vital tools for young people seeking to secure their financial futures and actively participate in the buoyant Turkish economy. Recognising the importance of nurturing financial and capital-market literacy for this burgeoning cohort of young investors, Borsa Istanbul has taken proactive measures. By prioritising the education and training of the young, Borsa Istanbul aims to equip them with the knowledge and skills necessary to navigate the intricacies of the capital markets.
BISTLABs, which stands for “Borsa Istanbul Simulation Laboratory”, emerged as a vital tool in the field of financial education in Türkiye. The BISTLAB project is the result of a collaboration between Borsa Istanbul and universities, and it represents a groundbreaking initiative to spread financial literacy and enhance investing capabilities among undergraduate and graduate students. These laboratories are equipped with state-of-the-art software and hardware infrastructure, creating learning environments for the students interested in finance. Borsa Istanbul’s BISTLAB project, started in 2018 and expanded through several universities since then, has taken financial and capital-market literacy to the next level by providing hands-on learning experience. Among other things, BISTLAB has had a significant impact on spreading financial knowledge, particularly among the younger generation.
One of the key components of BISTLAB is the BIST-S (BIST SIMULATION) module, developed by Borsa Istanbul. This web-based trading simulation includes Borsa Istanbul’s equity market and derivatives market instruments. Students and instructors have the opportunity to buy and sell equity instruments and futures contracts at real prices and option contracts at theoretical prices, providing them with a hands-on experience of real-world financial markets. Through BISTLABs, experts from Borsa İstanbul collaborate closely with university instructors to ensure that trainers are well-equipped with the necessary information to provide high-quality education. These simulation laboratories in universities contribute significantly to the provision of training for students and the dissemination of capital-market literacy.
By providing hands-on learning experiences and simulation laboratories, BISTLAB is not only spreading financial knowledge, but also fostering a new generation of financially savvy individuals who are well-prepared to navigate the complexities of the financial world. Through initiatives like BISTLAB, we can empower individuals to make informed financial decisions, ultimately contributing to a more economically resilient and prosperous society.
The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.