Turkish stocks lost a whopping 2.67% in Friday’s trading, as President Erdogan and economy czar Simsek took cracks at speculation. Addressing the participations in the 150th year jubilee of the Istanbul Stock Exchange, the president largely addressed the attractiveness of Istanbul as a regional finance hub and the potential in Turkey’s still fledgling capital markets.
Yet, Erdoğan cautioned against the influence of “politician and economist greedheads who manipulate the market,” urging the Capital Markets Board (CMB) and Borsa Istanbul stakeholders, particularly those involved with the main BIST-100 index, to be more sensitive.
The president argued the impact of speculative narratives on investors’ sentiments, particularly during election periods. Drawing a comparison with developed countries, he noted that “denigrating the capital market for political gains is not a norm,” emphasizing the need for responsible discourse.
“Financial liberalization, free foreign exchange regime and integration with the global economy have been our fundamental principles during our period in power,” Erdoğan said, reflecting on Türkiye’s perceived liberation of its stock exchange from what he referred to as the “grip of casino capitalism”, appears to have caused great consternation in the stock market, where prices are largely determined by high net worth individuals who at times form “syndicates” to speculate in one stock or the other.
Taking the podium after the president, Finance and Treasury Minister Şimşek acknowledged the existing gap between Borsa Istanbul and similar international stock exchanges, and stressed that the BIST is a vital platform for capital markets.
“It is not a playground. Therefore, the [supervisory] efforts made by the Capital Markets Board (SPK) will be even more effective in the period ahead,” he noted.
Rumors of large scale manipulations by syndicates of unscrupulous investors run rampant among retailers, who have flocked to the stock market in millions and largely invest in IPOs.
Turkish stocks are finally receiving interest from global fund managers, who were net buyers according to data sovereign the last two weeks. However marginal prices are still determined by retailers. Stocks are already under pressure as TL deposit rates soared past 50% according to latest Central Bank data covering the week ending on 15 December.
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