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BIST Corporate Governance Index (XKURY)

BIST Corporate Governance Index (XKURY) is the index in which the companies that apply Corporate Governance Principles are included.

BIST Corporate Governance Index aims to measure the price and return performances of companies traded on Borsa Istanbul Markets (except companies in Watchlist Companies Market and List C) with a corporate governance rating of minimum 7 over 10 as a whole and minimum of 6.5 for each main section.

The corporate governance rating is assigned by those rating institutions that are licensed by the Capital Markets Board (CMB) as a result of their assessment of the company’s compliance with the corporate governance principles. Ratings are assigned upon the request of the rated company and renewed annually. Those companies that obtain minimum ratings required are included in the index a business day after the rating is published on the Public Disclosure Platform (PDP).

Calculation of the Corporate Governance Index started on 31.08.2007 with the initial value of 48,082.17.

Ratings of companies included in BIST Corporate Governance Index are available in the company disclosures sent to the PDP.

The calculation og the BIST Corporate Governance Index started on 31 Ağustos 2007 with 5 companies. Today, 50 companies are included in the index. Previously, superior market performance of those companies who comply better with the corporate governance principles could only be proven by  empirical studies that were sourced from outside Turkey. Certain academics had gone further to question the validity of such studies and argued that the positive relationship between better compliance with corporate governance principles and the market performance cannot be proven. We have tried to counter these arguments by pointing at the Brazilian example. The Special Corporate Governance Stock Index (IGCX) has consistently outperformed the broader based indices of BM&FBOVESPA. We now have a clear domestic evidence. Since the beginning of 2009, the BIST Corporate Governance Index (XKURY) has outperformed the broader based BIST 100 Index by 35 percenatge points (444% increase as opposed to to 387% increase).

The following charts demonstrates the difference between the performances of the two indices:

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