Turkey's market regulator has announced the liquidation of certain funds managed by seven asset management companies. This action follows the inability of at least three asset managers, notably Tera Portfoy and Pusula Portfoy, to fulfill redemption requests from investors in some of their funds. This failure triggered a steep selloff in the Turkish equity market.
The Capital Markets Board (SPK) has ordered the closure and liquidation of 130 investment funds from these seven companies. These firms include Tera, Pusula, Hedef, Atlas, A1 Capital, Pardus, and Bulls Portfolio Management. Purchases and redemptions for all designated funds have been immediately suspended, with the SPK set to determine the specific liquidation process. The regulator also temporarily reduced the minimum equity maintenance ratio for margin transactions from 35% to 20% until October 2, to protect investor interests and stabilize market conditions.
The crisis was triggered by Pusula Portfoy's failure to meet withdrawal requests, leading to investors pulling as much as $1 billion from Turkish funds in a single day. This rapid exodus contributed to the Borsa Istanbul's main index falling nearly 6%. The SPK's intervention aims to address this liquidity crunch and prevent further contagion in the financial system. Separately, the SPK also filed criminal complaints against 38 individuals and imposed two-year trading bans for alleged share manipulation involving three listed companies, including blocking Pusula Portfoy from trading Katılımevim shares on its own account.
The turmoil is seen as a significant test for Turkey's Treasury and Finance Minister Mehmet Şimşek's efforts to restore international confidence in the Turkish economy. The central bank has responded by making an additional 300 billion lira (approximately $6.2 billion) available to banks in one-week loans, up from $1 billion the previous day, to ease the liquidity shortage. Despite the initial market rout, the BIST 100 index recovered some ground, rising about 2.2% after the measures were announced, though investors in the affected funds await details on the liquidation process and payout timelines.
