Abstract:

In this study, the stock preferences of foreign investors for their portfolios were analyzed for Istanbul Stock Exchange (ISE) during the period 2006-2011. Analysis results show that foreign investors prefer big companies having large market capitalization while domestic investors prefer small companies having small market capitalization. When the domestic and foreign investors are examined in detail on the basis of investor groups, it is found that especially equity funds prefer investing in companies having high shareholders’ equity. When the foreign investors are analyzed whether they prefer the companies included in the ISE City indexes, the regression results were found to be statistically insignificant. Although the regression results were statistically insignificant, the coefficients for the cities; Ankara, Istanbul, Izmir and Tekirdag was observed to be positive. These results give clues about foreign investors’ preferences for the companies located in these cities.

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