Turkish Stock Market Plummets Amid $1 Billion Fund Run

Turkey's stock market experienced a significant downturn on September 16, 2026, with the BIST 100 index falling by 5.54% to close at 13,122.58. At one point during the trading session, the index had dropped as much as 7.7%. This sharp decline was driven by a mass withdrawal of approximately $1 billion, or 550 billion Turkish lira, from local investment funds as retail investors reacted to a liquidity crisis triggered by regulatory changes.

The crisis was exacerbated by recent actions taken by Turkey's Capital Markets Board, which imposed stricter regulations on fund managers. These rules targeted the practice of investing in illiquid stocks, often linked to affiliated parties, which had raised transparency concerns among global index providers. As fund managers were forced to unwind positions in these low-free-float stocks, the lack of buyers led to a liquidity mismatch, prompting a rush of redemption requests from nervous investors.

Pusula Portföy, managing around $13 billion in assets, was the first firm to default on redemption requests, followed by Tera Portföy, which reported defaults totaling 366 billion lira, approximately $7.5 billion. Since late August, Turkish funds have seen cumulative outflows of about 128.7 billion lira, or $2.7 billion, indicating a growing lack of investor confidence prior to the crisis. In response to the turmoil, Turkey's Financial Stability Committee has scheduled an emergency meeting to discuss potential measures to stabilize the situation and address the structural issues facing the investment landscape.

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Source: KLEA News