Abstract:

With the expansion of the world trade, the interaction between the countries has increased. Increased interaction has led to increased economic liberalization and capital movement between countries, and increased investment instruments in the financial markets. The expansion of investment alternatives has brought together a number of risks. Savers who prefer to invest want to know the risks they will face before they make their investments. In this context, savings owners invest taking into account the systematic and non-systematic risks. Investors look at a set of parameters with a risk indicator in their financial decisions. When investing decisions are made, it is required to obtain a return on the risk premium. In the calculation of the risk premium, the individual risk premium of the investment instrument is considered in the parameters used in the measurement of macro risks. CDS is among the parameters that investors look for to get aware of the economic situation. The credit rate exchange (CDS) can be considered as an insurance transaction that a loan entity (the recipient) has undertaken in order to protect the opposite party (the debtor) from the possibility of credit rate. This study examined whether there is a relationship between CDS risk primes and net portfolio investments. In the framework of the study, it was attempted to identify whether there is a relationship between the three-month quarter data of credit exchanges between January 2010 and September 2018 and net portfolio investments during this period. The study used the ARDL Border Test Approach and Cause Analysis as a method. The findings of the study found that the co-integration relationship between CDS primes and portfolio investments and the cause of CDS’s portfolio investments. With another statement, it was found that CDS affected portfolio investments.

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