TCMA ANNUAL REPORT 2018

Distinguished Members, Turkish economy was able to complete 2018 by posting 2.6% growth despite the rough conditions. Although the concerns stemming from the growth issues in global economy and trade wars negatively affected the emerging countries and Turkey, our capital market successfully passed this difficult test in 2018. The Sector Preserved its Robust Financial Structure In a period characterized by global liquidity crunch, increased interest rates and escalated fluctuations in asset prices, the market capitalization of our Stock Exchange was down by 10% to TL 795 billion in 2018. On the other hand, average daily trading volume increased by 37% in the equity market to TL 8 billion, and by 53% in futures to TL 5 billion. Total assets under management by asset management companies, including private pension funds, rose to TL 173 billion by the end of the year. This performance reflected also on our members’ revenues. The profit posted by intermediary institutions in 2018 grew by 53% and reached TL 1.2 billion, whereas the profit of asset management companies grew by 29% to TL 214 million. The Most Important Structural Development was Experienced in Savings Growth The most important development in 2018 in capital markets was experienced in the area of savings growth. With the introduction of auto enrolment system in private pension, over 5 million people began investing their savings in pension funds. The number of private pension participants topped 12 million people. We are anticipating this figure to keep increasing with the inclusion of workplaces with 5 to 9 employees in auto enrolment scope in 2019. Capital Markets Provided Funding to the Real Sector Another development that will positively influence our sector was in the area of creating funds for the real sector, which is the main function of capital markets. During 2018, funds worth approximately TL 90 billion were provided to companies through capital increases, public offerings and bond issuances. Activities for Deepening the Capital Markets Continued An important step was taken to generalize securitization activities in our country, which are heavily used in international capital markets: the Development and Investment Bank of Turkey carried out an asset-backed securities issue in December 2018. The success of this issue worth TL 3.15 billion can be regarded as a turning point in Management and Hedging in Volatile Markets” which was initiated in 2017 as a cooperative effort with our members. A total of 465 people took part in the investor training programs organized in cooperation with Antalya, Bursa, Kocaeli, and Ankara Chambers of Industry with market specialist speaker support from our members and with the contribution of renowned economists. Together with our members, we have initiated investor education programs on “The Role of Capital Market Institutions and Instruments in the Manufacturing Industry’s Access to Financing”. The education programs are intended to inform companies, investors and interested parties in need of financing and planning to obtain financing from the capital markets about equity offering, debt instrument issuances, company mergers and acquisitions, and to raise awareness of the same. A total of 120 people took part in the investor education co-organized with the Aegean and Denizli Chambers of Industry. In addition to these activities, in 2018, we kept reaching out to our youth for investing in the future of our capital market. We held seminars attended by approximately 2,600 students at 10 universities across Turkey. In the coming years, we intend to reach a much higher number of people from different cities in Turkey. The Sector preserved its robust financial structure, 2019 will be marked as a year of the capital market’s increased share in the pie. Overview of 2018 20 TCMA 2018 ANNUAL REPORT