Investment fund crisis in Turkey echoes in international financial circles

British economic magazine The Economist wrote that the investment fund crisis in Turkey threatens hundreds of thousands of investors as well as the country's goal of becoming an international financial center and its emerging market status.

Remarkable extraordinary surges in markets

Drawing attention to the scale of price movements in Turkey, The Economist stated that some investment funds announced returns that seemed too good to be true.

It was reported that asset management company Tera's main fund surged by over 60,000 percent in three years and shares of Destek Finans Faktoring increased.

Payment difficulties and liquidation of funds

It was stated that Tera and some portfolio management companies struggled to make payments to investors wanting to withdraw their money, and allegations of ponzi-like schemes emerged.

It is estimated that the Capital Markets Board has decided to liquidate 131 investment funds, and these funds hold assets of approximately 18 billion dollars.

Declines in the stock market and investor losses

It was noted that Turkey's main stock market index dropped by more than 5 percent on September 16, and approximately 30 billion dollars was wiped from its market value within just two days.

It was stated that at least 450,000 investors face the risk of losing part of their money and long waiting processes.

Risk to emerging market status

It was reported that index provider MSCI signaled in June that Turkey could be downgraded to frontier market status if regulators failed to act.

It was stated that following the new rules introduced by the Capital Markets Board at the end of August, fund managers turned to selling shares and prices dropped.