Istanbul Stock Exchange Reached its All-Time High

On Monday Istanbul Stock Exchange reached its all-time high of 59700 in intra-day trading (bkz. definition of insider trading). However, you should not be misled by this claim because in December 2007 ISE-100 index reached 58600 level. Since then the cumulative inflation rate in Turkey is around %20 and when you factor inflation into prices 59700 is not an all-time high in inflation adjusted terms.

Another factor in determining whether ISE achieved an all-time high is dividend yield. ISE-100 index is similar to S&P500 index, it excludes dividends when calculating index values. Hence every year the increase in index value is underestimated by the same amount as dividend yield. Yet, the dividend yield in the past 2.5 years still is not enough to neutralize the effect of inflation. So, we can still claim that Istabul Stock Exchange has not reached an all-time high in real terms.

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