Sat Sep 23 2017, 4:56:26 +03

IDB plans to buy stake in Turkey's state-run stock exchange

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(Istanbul-AlummahWorld-Rajab 21,1438H) The Saudi-based Islamic Development Bank (IDB) reportedly plans to take at least a 10 percent stake in Turkey's state-run stock exchange.

The Islamic Development Bank is an international Islamic financial institution, established in accordance with Articles of Agreement done at the City of Jeddah, Kingdom of Saudi Arabia in 1974.

The purpose of the Bank is to foster the economic development and social progress of member countries and Muslim communities individually as well as jointly in accordance with the principles of Shari'ah i.e., Islamic Law.

According to a report published by Daily Sabah, IDB expects to finalize negotiations with Borsa Istanbul in two to three months.

Equity investments are rare for the AAA-rated IDB, which focuses primarily on extending trade financing and grants across its 57 member countries, but Turkey is seen as a key market to expand the reach of Islamic finance.

IDB and Borsa Istanbul signed a cooperation agreement in November, with discussions currently ongoing to decide on a specific size and time frame for the stake.

The bourse has a share capital of 423 million lira ($115.6 million), implying a value of 42.3 million lira for a 10 percent stake.

The exchange is majority-owned by the Turkish government via its sovereign wealth fund, but also includes a 10 percent stake from the European Bank for Reconstruction and Development and a 7 percent stake from NASDAQ.

Borsa was created in 2013 after the merger of the Istanbul Stock Exchange, Gold Exchange and Derivatives Exchange, ahead of plans for an initial public offering.