Sense-making and storytelling in financial markets: the case of the Istanbul stock exchange

Abstract

In this thesis, I investigate sense-making processes in financial markets. My focus is on the role of narratives in these routine activities in digital market places or what Cetina and Preda (2007) describe as scopic market systems. I conceptualize narratives told by market professionals in these systems as another form of market device (Callon et al., 2007) which combines different modes of knowing and explanation to cope with flows of data/information and funds, and works to generate value from assets exposed to markets. From a sociological perspective, I argue that the substitution of social network-based information search and face-to-face exchange relationships in financial markets with flow-based and anonymised representations and exchange relationships do not undermine the importance of social networks in shaping sense-making and decision-making in financial markets. However to argue so, I broaden the concept of social network with the help of Bourdieu’s (1997) notion of economic, social and cultural capital. I introduce the notions of field and meta-field of power, habitus, and position-taking by Bourdieu (1997, and Wacquant 1992) to my conceptual discussion of financial markets. In light of this, I describe financial markets as hierarchical and competitive structures inhabited by different groups of investors and intermediaries and shaped by competition and conflict among these groups. I argue that these groups’ position in the field is conditioned by their economic, social, and cultural capital which are generated and sustained within and outwith the field. Consequently, I suggest that these groups’ sense-making and investment activities and their use of market devices including storytelling acts should exhibit distinctive modes in accordance with the specific positions they have voluntarily or involuntarily taken in the field. To substantiate these claims with narrative evidence, I present the case of the Istanbul Stock Exchange (ISE) in Turkey. Opened in 1985, the ISE provides an instrumental case to study the role of sense-making narratives as another form of market device in scopic market systems with a Bourdieusian sociological framework. As gathered from publicly available information and early pilot fieldwork in the ISE headquarters, the ISE as a field has been occupied by three dominant investor types since 1991. These are domestic retail (DRIs), domestic institutional (DIIs), and foreign institutional investors (FIIs). These three groups have a dominant weight in either trading volume or share ownership in the ISE. Drawing on my (participatory) observations between 2008 and 2009 in an asset management company and four brokerage houses which served DRIs and/or DIIs and FIIs, I present evidence on how distinct combinations of economic, social and cultural capitals among these dominant investor-intermediary groups shape their sense-making activities and consequent sense-making stories in the ISE.