Turkish Stocks Drop Following Police Raids on Businesses Linked to President’s Rivals

turkey-police

Turkish stocks declined the most in more than a week after police raided businesses including TV stations and newspapers in an apparent crackdown on companies linked to President Recep Tayyip Erdogan’s main enemy.

Gold miner Koza Altin Isletmeleri, energy explorer Ipek Dogal Enerji and mining company Koza Anadolu Metal all plunged the most allowed after the Ankara headquarters of their parent, Koza Ipek Holding, were raided on Tuesday. The conglomerate is linked to Erdogan’s former ally and now biggest rival, the U.S.-based cleric Fethullah Gulen.

The declines will be a setback for companies that had rallied after an inconclusive June election in Turkey, which failed to hand an outright majority to Erdogan’s former party and spurred optimism Gulen-linked shares stood to benefit if Erdogan’s grip on power weakened. Opposition party CHP lawmaker Baris Yarkadas said the crackdown will widen to target other newspapers critical of Erdogan as he prepares for Nov. 1 repeat elections.

“The investigation on listed Koza-Ipek group companies adds to the already high implied political risk premium in Turkey particularly for foreign investors,” Akin Tuzun, an analyst at Moscow-based VTB Capital, said by e-mail.

Koza Altin tumbled 11 percent to 21.75 liras at the midday break in Istanbul, the biggest drop since January 2014, and Koza Anadolu slid 10 percent. Ipek Dogal Enerji Kaynaklari fell 11 percent to 1.95 liras, the lowest level since March 30, becoming the worst performer on the Borsa Istanbul 100 Index. The nation’s benchmark gauge fell 1.5 percent.

SOURCE: Tugce Ozsoy
Bloomberg

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