MSCI Inc. has frozen changes to Turkey’s equity indexes and warned the country’s emerging-market status could be downgraded due to a crisis in its fund industry. The index provider cited concerns over “possible coordinated trading” in funds linked to small listed companies, giving Turkey until June 2027 to show progress. Without clear action, MSCI may reclassify Turkey as a frontier or standalone market, which could trigger sell-offs by global investors.
The Borsa Istanbul 100 Index fell 3% on Friday, down 17% since September. Regulators have liquidated 131 funds, arrested executives, and removed 27 stocks from the main index. Despite reforms, MSCI insists on credible enforcement and better free-float transparency.
FTSE Russell has also raised concerns, though it still classifies Turkey as an advanced emerging market. Analysts say the regulator’s crackdown shows intent, but investor confidence remains fragile.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing