Stock Pickers in Turkey Warned to Be Careful as Market Soars

(Bloomberg) --

As Turks rush to join the local stock market's longest rally in 27 years, the Istanbul exchange has a warning for them: be careful with your money and watch out for swindlers.

The Borsa Istanbul 100 Index headed for its 12th day of gains Thursday, the best winning streak since 1993. With returns on Turkish fixed-income products increasingly unattractive and amid a widening clampdown on investments in foreign-currency assets, more mom and pop traders have turned to studying the stock market for winning bets.

“Equities are stores of value. Be careful while picking them,” the exchange said in a tweet on Thursday. “You can learn about a good investment by consulting good specialists.” The message included the hashtags “retail investors” and “stay away from market fraudsters.”

The tweet was part of plans to better inform investors and not a response to any event or development in the market, an official from the exchange said in response to questions. “This is a continuing effort and more of these informative videos and posts will follow. Borsa Istanbul's corporate management aims to increase financial literacy and awareness,” he said.

Turkish Stocks Thrive as Fixed Income's Fading Allure Fuels Risk

The Borsa Istanbul SME Industrials Index, made up of the small and medium-sized companies often favored by retail investors, has jumped 61% this year, compared with a drop of 4.3% for the main benchmark.

One of the biggest drivers of the gains has been a surge of 634% in Covid-19 diagnostic kit maker RTA Laboratories. A drop in RTA's shares in the past two weeks sparked anger among retail investors who missed out on the spectacular rally, fueling a social media controversy that led to two senior figures at an Istanbul brokerage losing their jobs.

Turkey's Capital Markets Board added its own note of caution, publishing a statement on its website on Thursday. It renewed a warning that investors be wary of those making stock recommendations on social media. The regulator said it continues to see activity designed to cause investors to lose money, adding that some of those making recommendations on social media lack the necessary qualifications or are even banned from equity trading.