ISE REVIEW

Abstract
The aim of this study is to evaluate the current deposit insurance system in Turkey and present some suggestions that may increase the effectiveness of the system. To our best knowledge, this is the first article in English regarding the Turkish deposit insurance system. Section II provides an introduction to deposit insurance system. Section III is devoted to the investigation of different approaches to deposit insurance system. Some problems that may stem from deposit insurance are discussed in section IV. Section V presents some suggestions that can increase the effectiveness of the present system. The final section summarises our results.

A Suggestion for a Bond Index
Gürsel Kona

Abstract
Since 1985, the debt securities markets in Turkey have become increasingly important with an acceleration in domestic borrowing required to finance continuously substantial budget deficits. Almost 80% of total stock of securities have comprised government debt securities, as of the end of 1995. Consequently, primary and secondary markets for government debt securities have made faster progress in comparison to the equity markets. In contrast, my six years of observations as a professional in the regulation side of the industry have shown me the most of the research and academic efforts have been diverted to the equity markets rather than the debt markets. In this study, a collection of bond indices have been suggested to measure the performance and summarise the changes in prices of bonds in secondary markets. Subsequently, theoretical background of Price and Performance Indices for four different maturity subgroups and one general Price Index (totally nine) have been introduced. Furthermore, some examples on various uses of these indices and associated comparisons, employing real data, have been supplied. These indices have been calculated and published by the ISE officially, since the beginning of 1996.

Managing Systematic Risk in Emerging Markets
Gökhan Ugan

Abstract
This article examines the adaptability of stock index futures into emerging markets as a systematic risk management tool. First, to determine which level of risk emerging markets have, a risk-return analysis was conducted. As a result of this analysis, emerging markets appeared to be riskier than mature markets. Then, this high risk factor was tried to explain by comparing market structure and some financial and economic indicators between emerging and mature markets. Earlier experiences show that stock index futures have some complications at the stage of introduction. Thus, some important measures that emerging markets must take are suggested at the end of this article.

Analysis of Factors Affecting the Performances of Turkish Financial IPOs
Halil Kiymaz

Abstract
In this paper, I empirically analyse the factors affecting the performances of the Turkish financial initial public offerings (IPOs). The sample consists of 39 financial firms listed and traded on the Istanbul Stock Exchange during the period of 1990 - 1995. The initial trading day raw and the market adjusted returns are 14.6% and 15.3% respectively. The investigation of factors influencing the initial performance reveals that the rising market between the fixing of the offering price and the first trading day, the standard deviation of market adjusted returns of IPOs during the first thirty trading days are found to be highly significant determinants of underpricing. Furthermore, the size of the income generated from public offering and the self-issued offerings variables are found to be weak determinants of initial underpricing.

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