ISSN: 1648 - 4460

International Journal of Scholarly Papers


Transformations  in
Business & Economics

Transformations in
Business & Economics

  • © Vilnius University, 2002-2008
  • © Brno University of Technology, 2002-2008
  • © University of Latvia, 2002-2008
An Assessment of Trading Behavior and Performance of Foreign Investors in Istanbul Stock Exchange
Ahmet Akin, Eyup Basti

ABSTRACT. This study examines the trading behaviour of foreign investors and their return performance in İstanbul Stock Exchange. Since foreign investors are argued to be feedback traders in many markets, we focus on momentum and contrarian strategies. We find that past returns affect the investment decisions of foreign investors. Our evidence suggests that foreigners tend to buy stocks that have performed well in the past and sell stocks that have underperformed in the past which indicates that foreign investors are momentum traders. We also investigate whether foreign investors earn high returns by momentum trading. We did not find evidence of high returns by foreign investors. Our analysis suggests that they are uninformed momentum traders.

KEYWORDS: feedback trading, Istanbul Stock Exchange, foreign investors, performance.

JEL classification: G11, G14, G15.

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Scholarly papers Transformations in Business & Economics
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