Orient Express: Why Freedom Finance is creating a Turkish broker

A subsidiary of the international banking and financial holding company Freedom Holding Corp. in Turkey - Freedom Finansal Hizmetler - will establish a brokerage company in this country, the company said. In early January, it became known that the new broker, which will operate under the name Freedom Yatırım Menkul Değerler AŞ, received the relevant authorization from the Turkish regulator, the Capital Markets Board of Turkey (CMB).

Turkey will be another country in which Freedom Finance's brokerage business will operate. At present, the holding companies have corresponding licenses as professional securities market participants in Kazakhstan (since 2008), Armenia, Kyrgyzstan, Uzbekistan, the USA and Cyprus. Through the latter structure Freedom provides services to clients in the EU and the UK.

According to Timur Turlov, the founder and principal owner of Freedom Finance, the holding has extensive experience of working in various jurisdictions, besides, it "has its own infrastructure, its own team of developers who can adapt to any regulatory regime and can do it quickly".

Birth of an idea

For the first time Timur Turlov voiced his plans to enter the markets of brokerage services in Turkey and UAE last year at the annual meeting with Kazakhstani press. According to the head of Freedom Finance, the company has been studying the Turkish market for more than five years.

Turkey is an attractive market for broker's professional activity: it is dynamic, well diversified, rapidly developing, due to a long period of high inflation attracts a significant share of the population's income and, as a rule, is not stingy with dividends.

In 2022, Turkey's leading Borsa Istanbul 100 Index (BIST), calculated on the basis of stock quotes of the country's 100 largest companies, became the world leader in terms of returns (+197% in Turkish lira and +88% in U.S. dollars at year-end). In 2023, after a short-term outflow of investments against the backdrop of the presidential elections, capital returned to the Turkish stock market - by the end of the first half of 2023, the Borsa Istanbul 100 had risen to a new all-time high.

2024 was not a good year for the Turkish stock market: by August, the leading index of the Istanbul Stock Exchange had already plummeted by 8%, showing a record fall in Europe. However, by mid-December, the quotations caught up, showing a 29-30% growth. According to the forecasts of Turkish financial analysts, in 2025 the Central Bank of the Republic of Turkey (CBRT) may start a cycle of interest rate cuts and lift the current bans on short selling of instruments, which will support BIST's positions and allow it to continue its rapid growth.

Shared Values

In addition to the high yield and variety of instruments on the Turkish securities market, Timur Turlov notes the territorial, linguistic and cultural proximity of this country to Kazakhstan, where the largest number of Freedom Finance's brokerage clients are concentrated.

- Many people in Kazakhstan, especially those who were educated in Kazakh-Turkish lyceums, feel a strong connection with Turkey. This is evident in the financial and political elite, many perceive Turkey very warmly, they like to invest and vacation there," he emphasized.

In addition, Freedom expects to attract Turkish clients who might be interested in investing in the markets of Central Asia, where the holding's position is particularly strong. Freedom's clients will also be interested in diversifying their portfolio with Turkish assets.

Freedom Finance's strategy for expansion into the Turkish market is centered on high-tech client solutions. According to Timur Turlov, the company has already managed to attract 320,000 clients in Europe thanks to a modern mobile trading application integrated with a banking application.

- By offering access to domestic and international markets, especially the US market, we are confident that we will be able to win our share in Turkey as well," he said.

This approach underpins the brokerage's organic growth strategy in the new country. At the same time, as Freedom Finance notes, no active buyout of local Turkish players is expected.