Turkey's Bist 100 Drops 8% on Redemption Crisis as 'Ponzi-like' Scheme Allegations Spread
Updated
Updated · Financial Times · Sep 18
Turkey's Bist 100 Drops 8% on Redemption Crisis as 'Ponzi-like' Scheme Allegations Spread
3 articles · Updated · Financial Times · Sep 18
Summary
More than 8% was wiped off Turkey’s Bist 100 this week after a local fund manager said some funds could not meet investor redemptions, reigniting a broader market scandal.
Authorities and investors say several asset managers bought illiquid shares in related companies, inflating fund net asset values and drawing retail money with outsized returns in what officials called a "Ponzi-like scheme."
Turkish stocks had already been stretched by a years-long rally fueled by inflation-hit retail investors, while the capital markets regulator had relaxed collateral rules to reduce forced selling on leveraged positions.
The episode has drawn comparisons with Archegos and leveraged AI-stock losses in the US, where margin debt stood at $1.5 trillion at end-August and regulators also face criticism for favoring market growth over investor protection.
That leaves Finance Minister Mehmet Şimşek under pressure to contain the fallout, even after authorities this week froze some funds, ordered 130 liquidations and referred 38 people to prosecutors.