Mustafa Aşkın: Investors in our country have a 'get rich quick' mentality

Kübra Karasu-12punto

The number of companies going public has continued to rise rapidly in recent times. Investors looking for places to put their money are also focusing their interest here. Economist Mustafa Aşkın evaluated the IPO landscape for 12punto.com.tr, warning investors who lack financial literacy.

THE GOAL IS TO SECURE LOW-COST FUNDING

Initial public offerings provide companies with many corporate advantages, such as transparency, auditing, discipline, fulfilling responsibilities to various stakeholders, increased brand recognition, and easier access to potential domestic or foreign partnerships. However, the number of businesses that prioritize these types of secondary benefits does not appear to be as high as one might think.

The primary goal is often to secure long-term, low-cost funding. While some companies choose to increase their business value by using these funds for rational activities such as making new investments, expanding market share, or engaging in R&D, others may use IPO funds for purposes such as allowing partners to sell their shares and exit the company, paying off debts, or entering low-yield ventures.

INVESTOR TYPOLOGY IN OUR COUNTRY HAS A 'GET RICH QUICK' MENTALITY

Looking at the development process of stock markets, it is not necessary for every investor to understand the mechanics of financial markets. However, it is important for those who do not understand them to seek support from the right people and institutions.

Although the history of the stock market in our country dates back many years, the current exchange was established in 1986. Having a relatively young stock market may mean that investors also need to develop. However, the investor typology in our country is more of a 'player-speculator'—that is, they have a 'get rich quick' mentality—rather than a traditional 'investor.' For this reason, the fluctuations experienced in the stock market are also very sharp.

THOSE LACKING FINANCIAL LITERACY MAY SUFFER LOSSES

Over the last 4-5 years, domestic investors have replaced the steadily declining number of foreign investors, and during this process, 'speculative' movements have increased even further. There have even been instances where the regulatory authority, the Capital Markets Board (SPK), identified events as manipulative.

It is ideal for every stock market investor to have basic financial literacy. However, for this to happen, certain regulations and efforts must be carried out over the years. Financial literacy is important not only for trading on the stock market but also for other financial decisions an individual makes. It is significant in many areas, from daily commerce to real estate transactions. Those who lack this knowledge, at best, engage in actions that do not align with the market's pricing mechanism, which can lead to serious losses.

News Source: Kübra Karasu