Spectral analysis of İstanbul Stock Exchange (ISE) stock prices in Turkey

In this thesis the analysis of Istanbul Stock Exchange is made with spectral analysis technique. The first part describes saving-investment relations; the theory of finance, securities, stock markets and basic concepts of spectral analysis and finance theory relationship. In the second part, theoretical concepts of time series and spectral analysis are described. Spectral analysis technique is a new and different technique to display and analyze events with a certain cycle experienced in daily life. Since the technique requires very complex mathematical equations to be described, the theory will be explained in details. In the third part, data on the Istanbul Stock Exchange will be analyzed by spectral analysis techniques. Since ISE, which has nearly 30 years of history, had been influenced by various factors during this time, the analysis has been executed very difficultly. Time series, thus spectral analysis techniques divides economic cycles into periodic portion with different time periods called as trend, conjecture, seasonal. The Turkish economic system has been transformed considerably in this period of 30 years, and free market economy has become more evident. The effects of these processes on the structure of the ISE have also been examined in this study. In conclusion, the results of this study are evaluated. Applicability of spectral analysis technique to ISE has been ensured and periodic components were identified. It has been found that many phenomena seen as random fluctuations actually form a cyclic effect. In addition, the spectral analysis char of ISE is compared with the studies on developed country markets. Furthermore, suggestions have been offered for the development of spectral analysis methods in Turkey. KEYWORDS: Istanbul Stock Exchange, ISE, BİST100, XU100, Spectral Analysis,Time Series, Fourier Transformations