TCMA 2020 ANNUAL REPORT

of the industry, we would like to express our gratitude to the members of the Board of Directors, Board of Auditors and Discipline Committee who served at the Association in the previous period for their valuable efforts and significant contributions. In this annual report, I would like to share the Association’s activities, the details of the roadmap we have devised, and my assessments of 2020. Esteemed Members, In the wake of the unprecedented Covid-19 outbreak that threatens the human health and dominates the global system completely, we have left behind a year characterized by uncertainty and challenges, during which we were compelled to fit our social and working life in our homes. Amid the negatively affected world trade and economy in the pandemic days, global capital markets are giving a good account of themselves. Low interest rates and high liquidity brought along increased investor interest in global capital markets. To the backdrop of an environment featuring high global liquidity and decreased interest rates, domestic investors’ interest in capital markets soared in our country, as was the case in the rest of the world. We witnessed that, owing to increased interest, the number of domestic individual investors that floated along the line of 1 million for many years before going up to 1.2 million people at year-end 2019 closed in on 2 million people by 2020 year-end. Domestic investors showed intense interest not only in the equity market but also in the funds industry managed by professionals. As a result, total assets under the management of asset management companies grew by 28% to TL 365 billion. The fact that the majority of individual investors that joined our equity market in the past one year consist of the youth is of great importance and promising for the future of our capital markets. Given our longstanding desire to broaden the investor base, we also find it very meaningful that these investors attracted to the stock exchange are from all over Turkey. The choices of new investors joining our equity market present us with noteworthy data that we need to consider carefully. We have observed that the new individual investors prefer companies outside the BIST-100 index rather than big companies traded on Borsa İstanbul. Consequently, BIST-100 index ended the year with 29% rise, while the non-BIST-100 stock price rose at a much higher 125%. The increased investor interest tripled the average daily trading volume in the equity market and brought it up to TL 26 billion. Higher investor interest in capital markets reflected also on our members’ revenues. In 2020, intermediary institutions booked TL 4.4 billion in profit, representing a 156% growth year-over-year, whereas asset management companies increased their profit by 106% to TL 655 million. Distinguished Members, We deem the development of the capital markets essential for sustainable growth of the Turkish economy, for democratizing finance by providing a broad-based distribution of the added value generated by economic growth, and for efficiently channeling resources to future- and technology-driven productive areas. The way to deepen and grow the capital markets is to increase the number of investors. Hence, we consider the increased interest of investors in capital market products in recent years as a historic opportunity from the standpoint of capital markets. Continuation of increased investor interest in the period ahead is critical for achieving the depth and magnitude we desire for our industry. To this end, we must first establish a solid investment environment that prioritizes, protects and assures investor rights. Important responsibility and duty fall upon all capital market actors in this respect. We will continue to be guided in our actions with the recognition of our responsibility in this sense in the future, as we have done so far; hence, we want to create an effective capital market culture by informing savers about the capital market products. To ensure the sustainability of this productive process that is vital for our capital markets, we are maintaining our cooperation with the Capital Markets Board of Turkey (CMB), Borsa İstanbul and other institutions. I would like to emphasize once again that, as TCMA, we always consider “protecting and informing the investors” as a matter of priority, and as the management team, we put it at the top of our roadmap. Despite the domestic investor interest that grew in the last year, there was a limited performance in the public offering side in the reporting period. Throughout the year, capital markets provided a financing of more than TL 1 billion to companies by way of eight public offerings. However, intense demand for public offerings triggered the initiation of the public offering process by a large number of companies for 2021. In the absence of an extraordinary development in global conditions, 2021 will be a year marked by “public offerings” with respect to our capital markets. TCMA 2020 ANNUAL REPORT 17