Turkey May Allow Futures Trades in 10 Biggest Stocks This Year

By Seda Sezer

Sept. 24 (Bloomberg) -- Turkey may allow trading of futures contracts in as many as 10 of the country's biggest companies as it grapples with the worst stock market slump since 2000.

TurkDEX, the nation's derivatives exchange, has applied to regulators to allow trading from November in the 10 stocks that have the highest volume on the Istanbul Stock Exchange, TurkDEX Chief Executive Officer Cetin Ali Donmez said in an interview.

Turkey's ISE National 100 Index has tumbled 37 percent in 2008, the biggest retreat since a 38 percent drop in 2000, as shares in developing nations declined on the freeze in credit markets. The most-traded shares in Istanbul include Turkiye Garanti Bankasi AS, the lender co-owned by General Electric Co., and mobile phone operator Turkcell Iletisim Hizmetleri AS.

The exchange may also allow trading of stock options in November 2009, Donmez said, adding that the products initially available will be ``easy to understand.'' The spread of complex derivative instruments in developed economies helped spur the credit crunch that resulted in more than $500 billion in losses at global banks.

TurkDEX, based in the western Turkish city of Izmir, was established in 2005 and currently allows investors to trade futures in Turkish Treasury bills and the country's main stock indexes, as well as currencies and some commodities such as cotton and wheat.

Donmez predicted that trading on the derivatives exchange will exceed the volume on the Istanbul Stock Exchange next year. Initial futures trading may not include all of the 10 biggest companies, Donmez said, without naming any of them.

To contact the reporter on this story: Seda Sezer in Istanbul at ssezer2@bloomberg.net.