Borsa Istanbul is grappling with a decline in both foreign and domestic investor interest, as high interest rates and the strong performance of alternative assets like gold and cryptocurrencies continue to divert capital away from the stock market.
The number of retail investors in the stock exchange has significantly declined, particularly among young traders with smaller portfolios. Since reaching a peak of 8.314 million investors in May 2024, the investor count has fallen by approximately 1.513 million, dropping to 6.801 million by the end of January 2025. Notably, while the number of investors holding portfolios exceeding 1 million Turkish liras saw only a marginal decline from 243,254 to 241,212, the steepest drop was recorded among those with portfolios valued under 20,000 liras. This segment, which largely consists of new investors drawn in by public offerings, saw a decrease of around 1.1 million people—from 5.243 million in May 2024 to 4.171 million in January 2025.
A demographic analysis highlights that younger investors, particularly those under 29, have been the primary force behind this mass exit. Their numbers plummeted from 2.191 million in May 2024 to just 1.414 million by January 2025. Even initial public offerings (IPOs), which typically drive market participation, have failed to counteract this downward trend. Since the start of 2025, seven companies have gone public, yet the number of participants in IPOs has dwindled to just 125,000.
Analysts emphasize that the stock market’s sluggish performance, in contrast to global equities, has been further pressured by the influx of IPOs. IS Investment remarked that “Borsa Istanbul has not kept pace with the gains seen in international markets, and the burden of frequent IPOs has contributed to its weakness.” Meanwhile, Yapı Kredi Yatırım pointed out that the trajectory of the market will be shaped by corporate earnings, inflation trends, and interest rates. Despite current uncertainties, they suggested that the BIST 100 index holds opportunities for investors willing to adopt a long-term approach.
The sharp decline in IPO participation has also caught the attention of the Capital Markets Board (CMB), prompting regulatory intervention. According to Bloomberg, the CMB is considering slowing down the approval process for new public offerings in response to fluctuating investor demand. Additionally, some companies that initially sought IPO approvals have reportedly requested postponements. The CMB had previously granted preliminary approval for over 90 companies to go public, but shifting market conditions are now leading to reconsiderations.
As investors continue to seek higher returns in alternative assets and fixed-income instruments, Borsa Istanbul faces mounting challenges in restoring confidence and reigniting market participation.