Fitch warns of rising risks for Turkish brokerages
International credit rating agency Fitch Ratings stated that brokerage firms have been the most affected by volatility in Türkiye's financial markets.
According to the agency, declining trading volumes, slowing securities issuance, and weakening investor confidence are putting pressure on brokerage commission revenues. Fitch reported that the total market capitalization of companies listed on Borsa Istanbul fell 34% to $274 billion between September 15 and October 30, while private sector debt securities issuance declined to $1.5 billion in October.
Fitch warned that sharp declines in equity prices could reduce collateral values and increase margin call requirements for investors. The liquidation of 131 investment funds with approximately TL 900 billion in assets was also cited as a factor undermining investor confidence. However, the agency noted that brokerage firms with strong capital and liquidity positions would be better equipped to manage existing risks. Fitch added that banks' direct exposure to the affected funds remains negligible, while no significant deterioration is expected in the credit profiles of insurance companies.
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