Turkish Vote Shrinks Stock Volumes as Traders Sit on Sidelines

(Bloomberg) -- Trading volumes in the Turkish equity market have dropped by a third in the past two weeks as uncertainty in the run-up to May’s presidential elections keeps investors on the sidelines.

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Average daily volumes fell to $3.2 billion compared with a six-month average of $4.9 billion, data from the nation’s stock exchange show. The Borsa Istanbul 100 Index has slumped more than 8% in March, putting the gauge on track for its worst quarter since the start of the pandemic three years ago.

The vote is shaping up to be closely fought as President Recep Tayyip Erdogan faces off against a united opposition that’s intent on unwinding his controversial fiscal and monetary policies. The uncertainty means traders are wary of placing wagers, according to Tuna Cetinkaya, assistant general manager at the Info Yatirim brokerage.

“Weaker trading volumes exaggerates the moves especially at times of panic selling,” he said.

With the stock gauge now trading below the psychologically important level of 5,000, investors are increasingly turning to alternatives like gold or foreign currency, Cetinkaya said.

The benchmark has fallen on 14 out of 21 trading sessions this month, even as Turkey’s sovereign wealth fund scoops up shares via the Ziraat Portfoy brokerage in a bid to support the market. The brokerage’s two largest exchange-traded funds have seen inflows of 10.7 billion liras ($559 million) in the month.

Turkey’s Stock-Buying Bonanza Flops as Technicals Signal Selloff

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