Turkish authorities have intervened to stabilize the country’s financial markets following a sudden run on certain investment funds that disrupted the Istanbul stock exchange and raised concerns about investor savings. Measures included freezing trading in funds managed by seven asset managers and ordering the liquidation of 130 funds, all aimed at curbing further market instability.
The turmoil emerged earlier this week after Pusula Portföy, a leading Istanbul-based fund manager, announced that some of its funds could not fulfill redemption requests on time. This announcement prompted a wave of redemptions from retail investors, triggering what analysts described as a "fund run." Subsequently, Tera Portföy revealed it faced similar difficulties, with two of its funds unable to meet redemption demands promptly, while Atlas Portföy extended the redemption waiting period for investors. Collectively, the assets managed by Pusula, Tera, and Atlas amount to approximately $29 billion.
In response, Turkey’s central bank relaxed collateral and lending requirements to ensure sufficient liquidity within Turkish financial institutions, thus minimizing the risk of forced asset sales. The Capital Markets Board (SPK) suspended trading in funds managed by Tera, Pusula, Hedef, Atlas, A1, Pardus, and Bulls Portföy to contain the market disturbance. Additionally, state-owned Islamic participation bank Emklak Katılım entered negotiations to acquire two savings-finance companies affiliated with the Pusula group, a move designed to shield household savings businesses from the crisis by providing a Treasury-backed bailout.
The Financial Stability Committee, which convened an emergency meeting, described the problem as concentrated in a specific fund segment and considered it temporary and manageable. The main priority, it said, was to prevent contagion risk and broader market panic.
The unrest in the fund market has surfaced at a sensitive moment for Turkey, as the government pursues an economic stabilization program led by Finance Minister Mehmet Şimşek, a former economist and strategist at Merrill Lynch, aimed at restoring international economic confidence.
Amid the investigations, 38 individuals suspected of market manipulation were referred to prosecutors. Emre Tezmen, chair of Tera Holding—one of the entities implicated in the turmoil—characterized the events as a “planned, deliberate and organised speculative attack” orchestrated by “notorious malevolent forces.” Tezmen has also expressed strong support for President Recep Tayyip Erdoğan on social media. He is reportedly subject to a foreign travel ban as part of the ongoing prosecution led by Istanbul authorities.
Turkey’s benchmark BIST 100 index, which fell sharply by 8 percent over Tuesday and Wednesday, briefly recovered by as much as 2.5 percent on Thursday before giving up some gains, reflecting ongoing market uncertainty as authorities seek to restore stability.