Turkish stocks slide as investors withdraw $1B in fund run

Turkey’s stock market just had one of its worst days in recent memory, and the trigger wasn’t geopolitics or an interest rate shock. It was a good old-fashioned bank run, except the banks were investment funds. The BIST 100 index, Turkey’s benchmark equity gauge, cratered 5.54% on September 16 to close at 13,122.58. At its worst point during the session, the index was down 7.7%. Retail investors yanked roughly $1 billion, approximately 550 billion Turkish lira, from local investment funds in a single day. Two prominent asset managers couldn’t keep up with the flood of withdrawal requests, and panic did the rest. How a regulatory fix broke the market Turkey’s Capital Markets Board, known locally as the CMB or SPK, had recently imposed tighter rules on fund managers. The regulations targeted a specific practice: funds loading up on illiquid, low-free-float stocks, often tied to affiliated parties, to juice their reported returns. Global index providers, including MSCI, had flagged transparency concerns around these concentrated holdings. That prompted the CMB to act, lowering ownership disclosure thresholds and capping single-stock exposure within funds. The new restrictions forced f...