Sharp Sell-Offs and Fund Crisis Deepen in Borsa Istanbul
While the BIST 100 index dropped by more than 5% on Borsa Istanbul, Pusula Portföy's inability to meet redemption requests triggered major liquidity concerns in the market and a billion-dollar retail outflow.
As the BIST 100 index declined by over 5% on Wednesday in Borsa Istanbul, a redemption crisis in some of Pusula Portföy's investment funds and individual investors withdrawing approximately $1 billion from funds drew the attention of the international press and markets.
Sharp Decline in BIST 100 Index
Sharp sell-offs were witnessed on Borsa Istanbul on Wednesday, with the BIST 100 index losing more than 5% in value. This drop further deepened the decline of over 2% recorded the previous day.
Pusula Portföy Crisis and Fund Outflows
Pusula Portföy's announcement that it could not meet investors' redemption requests in certain money market and investment funds increased market volatility.
According to Fintables fund flow data, retail investors withdrew approximately $1 billion from investment funds during the day.
Local Funds' Positions in Equities
Analysts state that the problem is not limited to a single fund manager, noting that over the past two years, some local funds have built heavy positions in the shares of companies with low free-float rates.
It is stated that these transactions drove up the prices of the relevant stocks and contributed to the increase in the net asset values of the funds.
Broad Investor Base at Risk
It is reported that at the end of August, Pusula Portföy had approximately 241,000 investment accounts, while Tera Group, which has been conducting acquisition talks, had over 500,000.
The total assets managed by the two companies were stated to be around $27 billion at the end of August.
MSCI Warnings and November Review
The recent developments brought back to the agenda MSCI's previous warnings regarding the detection of coordinated trading behaviors in fund assets linked to small-scale companies in the Turkish market.
MSCI had stated that it could initiate a consultation process if no tangible progress is seen by the November 2026 review.
Manipulation Investigation by CMB
The Capital Markets Board (CMB) filed criminal complaints against 38 individuals on allegations of manipulation activities carried out in the shares of three companies and imposed a two-year trading ban.
It was reported that Pusula Portföy and its managers were among the individuals targeted by the enforcement actions.
Emphasis on Regulation by Minister Şimşek
Treasury and Finance Minister Mehmet Şimşek stated in a remark on Wednesday that the non-bank financial sector needs more regulation and supervision.