Determination of the effects of the debt instrument's characteristics on investor preferences in the debt securities market: The case of Turkey

The debt securities market in our country has not developed for a long time and the public sector has maintained its dominance in these markets. Due to the crowding – out effect, the private sector could not find funds the markets and either could not issue debt instruments or was able to issue very small amounts for a long time. However, since 2006, issues started again with private sector bonds, and the issuance of other debt instruments continued by the private sector in the following years. In this study, it has been investigated which independent variable is effective in the selection of instruments traded in the debt instruments market. 303 borrowing instruments, which are traded in the borrowing market and whose amortization date has not yet expired, have been used as the data set. The results obtained with multinomial logit and multinomial probit models are presented. While calculating the relative risk ratio, government bonds are determined as the basic selection scenario. Clean price criteria is determined to be effective on investors choosing the treasury bills instead of government bonds. The closing price, volume and simple weighted average criteria are effective in private sector bonds. Clean price, volume and cumulative volume are effective in financing bills. When the values are analyzed in terms of closing prices, the risk is very high in choosing financing bills and treasury bills. Looking at the marginal effects, it is seen that it prefers government and private sector bonds by the clean price. According to the closing price, it is found that treasury and financing bonds are preferred and financing bonds are preferred more. Government bonds and treasury bills stand out by volume. For cumulative volume, all instruments except financing bills are preferred. At nominal value, only financing bills are preferred. On simple weighted average, government bonds and financing bonds are preferred. Thus, over these two models, it has been revealed that which instruments investors prefer based on which criteria.