How Does Ekrem Imamoglu’s Arrest Affect Turkey’s Market and BIST 100 Index?

Turkey’s financial landscape faces a significant challenge following the arrest of Istanbul Mayor Ekrem Imamoglu.

Key Takeaways

Turkey’s stock exchange main index fell 7.8% on Friday amid protests over the arrest of Istanbul mayor Ekrem Imamoglu.
Imamoglu was arrested on Wednesday, just before being named the CHP party’s candidate for the 2028 presidential race.
The BIST 100 index had already dropped 8.7% on Wednesday following Imamoglu’s arrest.
The index fell below 9,000 points on Friday, marking a decline of over 16.5% in five days.
Imamoglu’s party condemns the arrest as a “coup,” and international bodies have raised concerns.

Allegations and Arrest

Ekrem Imamoglu, a prominent political figure and formidable opponent to President Erdogan, was arrested on Wednesday. He faced allegations of corruption and links to a terrorist organization, which preceded his announcement as the CHP party’s presidential candidate for 2028. This arrest has triggered massive protests, shedding light on the fragile balance between Turkey’s political arena and economic stability.

Imamoglu’s supporters and the international community have questioned the motives behind the charges. While the Turkish government insists on the legitimacy of the accusations, critics point to a politically influenced judicial system. The arrest has already spurred global condemnation, reflecting the increasing political discord within Turkey.

Market Reactions

The arrest’s immediate effect was a plummet in Turkey’s main stock index. The BIST 100 index saw a dramatic 8.7% drop on Wednesday, followed by a further 0.5% decline on Thursday. By Friday, the index had fallen 7.8%, prompting pauses in trading as the market struggled with uncertainty. This added up to a troubling 16.5% decrease over five days, an indication of investor anxiety regarding Turkey’s economic health.

Investors appear wary about the future, as political instability raises concerns about potential economic repercussions. While Turkish authorities attempt to mitigate fears, the profound market drop indicates a lack of confidence in domestic political developments, including the treatment of political rivals.

Global and Domestic Reactions

International and domestic responses to Imamoglu’s arrest underscore the political tension in Turkey. The CHP party denounced the arrest as a coup against the public’s will. Meanwhile, international organizations like the European Union expressed deep concerns over perceived democratic backsliding, stressing the importance of due process and transparency in the judicial proceedings.

On the streets, protests have erupted, countered by government narratives labeling them as “street terror.” This clash further highlights the country’s deep political rifts as President Erdogan’s administration grapples with maintaining order amid widespread dissent and skepticism from the global community.