There’s a specter haunting stock traders in Istanbul that some are calling “the dude.”
A mystery investor who first appeared a year and a half ago with $450 million of bets on a single day, almost double the market average, is now executing major transactions with increasing frequency, scaring away competitors who can’t figure out when he or she will strike next, traders and bankers said.
Turgay Ozaner and his partners at Istanbul Portfolio have been scouring the official daily trading recap for months for signs of the shadowy figure’s identity, but it’s a code they’ve yet to crack. Whoever it is seems to have skipped from one local brokerage to the next honing his system and turning the latest, Yatirim Finansman, into the biggest net buyer on the market by far, NewsMarket reported.
“Nobody knows anything for sure,” Ozaner said in his office in a picturesque neighborhood on the shores of the Bosporus. “And this is Turkey, where usually we all know what’s going on.”
At least one European bank’s clients have stopped taking short-term positions in Turkish stocks after concluding the investor is using an algorithmic system in which complex formulas decide trades, while others are avoiding the market until they have more information, a person familiar with the matter said.
“Herif,” or “the dude,” has helped lift the average daily trading volume on the Borsa Istanbul almost 8% this year, compared with a 15% decline on the main exchange in Warsaw and a 27% plunge in Moscow, data compiled by Bloomberg show. The Borsa Istanbul 100 Index has advanced 13% in the period, outpacing Russia’s Micex and Poland’s WIG20.
Closely held Yatirim Finansman, which handled less than 2% of all trades two years ago, now accounts for the majority on some days.
On Feb. 22, for example, the brokerage placed buy orders for 486 million liras ($167 million) of shares, about 15 times more than Merrill Lynch, the second-biggest dealer that day, according to official data. And in the 16 trading days to March 8, it registered almost one billion liras of buy orders for Turkey’s six largest banks and Turkish Airlines—helping push the Borsa index to consecutive three-month highs.
In all of January and February, Yatirim Finansman bought a net 1.23 billion liras of stock, almost 70% more than the next largest buyer, UBS Menkul Degerler AS. This is why Istanbul Portfolio’s Ozaner said the secretive buyer is now “making the market.”
It’s not rare in emerging markets for a single player to move an index via short-term trades, especially in countries like Turkey that depend on foreign inflows. But nobody in Istanbul has seen anything like what is happening now.
