Turkish authorities are stepping up measures to provide support for equities ahead of a planned resumption of trading on the stock exchange on Wednesday, according to an official with direct knowledge of the matter.
(Bloomberg) — Turkish authorities are stepping up measures to provide support for equities ahead of a planned resumption of trading on the stock exchange on Wednesday, according to an official with direct knowledge of the matter.
The government is rolling out measures to try and boost Turkish equities when trading resumes, including offering tax waivers on share buybacks, the official said, asking not to be identified as the decisions haven’t been made public. Trading was suspended last week in the wake of devastating earthquakes in the nation’s southeast.
Before Monday’s meeting, officials were weighing an extension to the trading halt that was scheduled to expire on Wednesday; the plan as of Tuesday morning was not to announce an extension and allow trading to begin on Feb. 15 as originally announced, the official said.
Treasury and Finance Minister Nureddin Nebati chaired a meeting with the central bank, capital markets board, the banking watchdog and heads of state-run commercial lenders on Monday, where the measures were discussed.
Authorities suspended trading on February 8 and canceled trades made that day after the earthquakes on Monday destroyed large parts of 10 cities in Turkey. Authorities decided against canceling transactions that took place during the two days following the quakes.
Fund Boost
Turkey will temporarily revoke the so-called withholding tax — currently 15% — that listed companies need to pay when they buy back their shares, according to the official.
In addition, private pension funds that receive a government match of up to 30% of individual contributions will be required to use the government contribution for stock purchases, according to regulation published in Official Gazette on Tuesday.
Two state-affiliated companies ramped up share buyback programs last week as the market rout deepened in the two trading days following the quakes. Telecommunications company Turk Telekomunikasyon — known as Turk Telekom — announced a new buyback program, and mobile-phone operator Turkcell Iletisim Hizmetleri AS boosted its buyback allocation.
Lenders Turkiye Halk Bankasi AS and Turkiye Vakiflar Bankasi TAO, along with insurance firm Turkiye Sigorta, also accelerated up their buyback programs.
–With assistance from Ugur Yilmaz and Tugce Ozsoy.
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