Türkiye has initiated an investigation targeting anyone responsible for generating and disseminating manipulative and misleading news that led to unusual price and volume fluctuations in Istanbul's stock market, according to a report.
The Istanbul Chief Public Prosecutor’s Office is probing individuals and entities accused of spreading “misleading and purposive” information, widening the investigation on equity trading after Friday’s sell-off, the Anadolu Agency (AA) said.
The investigation follows complaints and will run concurrently with a probe by the Capital Markets Board (SPK), which will report on the matter, AA said on Sunday.
On Friday, the Capital Markets Board launched an investigation into unusual price movements in the Borsa Istanbul Stock Exchange (BIST). All transactions by all institutions are being reviewed by both the board and the exchange, it said.
The benchmark BIST 100 Index experienced a significant drop of 3.4% during the afternoon session on Friday, leading the exchange to implement an uptick rule on short-selling.
Although the market managed to recover some of its losses, it still closed the day at 9,602.16 points, down 2.1% from its close on Thursday. Regulators have not provided specific reasons for the volatility.
On Monday, Borsa Istanbul implemented a one-day uptick rule for short-selling transactions involving the top 50 companies. The rule stipulates that stocks can only be sold short at a price higher than the last transaction price of the instrument.
The BIST 100 Index opened Monday at 9,694.37 points, up by 0.96%. It was up by 0.31% and traded at 9.632,13 points at 1:50 p.m. local time.
The developments came just days after JPMorgan said equity markets in Türkiye in Argentina could post returns of more than 20% this year, driven by policy reforms aimed at reducing inflation levels.
Its analysts said in a note Türkiye's ongoing path to lower inflation and lower interest rates could bolster its equities.
The BIST 100 index has traded at seven times its 12-month forward price-to-earnings (PE) ratio, as per JPM estimates.
Having upgraded Turkish equities to "overweight" from "neutral" last month, JPMorgan says falling inflation and the rate-cutting cycle could further help the broader stock market.
In local currency terms, the BIST 100 index has risen about 8% in the last 12 months.
After interest rate cuts of 250 basis points each in December and January, the Turkish central bank's policy rate now stands at 45%, and economists expect rates to be lowered to 30% by the end of the year, which is in line with JPMorgan's forecasts.
