Stocks in Turkey sank on Wednesday, its currency slumped while the yield on government bonds increased as investors fled markets after political temperatures rose with the arrest of President Recep Tayyip Erdogan's leading rival.
The Borsa Istanbul 100 Index fell almost 7 per cent at opening, which led to a halt in trading under the bourse’s circuit-breaker rules. Stocks resumed trading 4.6 per cent down when the bourse reopened and were trading 5.85 per cent lower at 1.28pm UAE time.
Of the 100 members of the benchmark gauge, 97 declined and only three managed to climb into green. Banks were the biggest losers, with Yapı Kredi slumping 10 per cent and AKBank slipping 9.9 per cent.
Sovereign 10-year bonds dropped, sending yields 175 basis points higher to 29.94 per cent. The lira tumbled beyond 5 per cent against the US dollar as the declines were the worst in the world among respective asset classes, according to Bloomberg data.
Turkish assets took a bruising after Istanbul Mayor Ekrem Imamoglu was arrested on Wednesday as part of a corruption investigation, according to Turkish media reports.
Local news outlets reported that a large group of security officers surrounded Mr Imamoglu’s home to take him into custody.
Early on Wednesday morning, Mr Imamoglu’s media adviser Murat Ongun said in a post on X that he was being detained. Mr Imamoglu said that hundreds of police were in front of his house but he would not give up and would continue resisting pressure.
Turkish authorities have also ordered the arrest of about 100 other suspects, including journalists and business people, as part of the same corruption investigation.
Mr Imamoglu was likely to be nominated as his party's candidate this week for Turkey's next elections. His arrest came a day after his university diploma was annulled, disqualifying him from running for the presidency.
According to Turkey's election laws, a candidate must have a university degree to run for president. The graduations and degrees of Mr Imamoglu and 27 others were declared void because of an “obvious error”, Istanbul University announced at the time.
“Turkish assets are under strong selling pressure,” Bloomberg quoted Piotr Matys, senior FX analyst at In Touch Capital Markets, as saying.
“To some investors, it’s also a reminder that President Erdogan intends to tighten his grip on power even more by attempting to prevent his biggest political rival from running in presidential elections due in 2028, although early polls can’t be excluded.”
The cross-asset sell-off in Turkey on Wednesday morning was also reflected in forward markets, with the overnight offshore rates rising more than 10 percentage points to 48 per cent, signalling investors unwinding their lira positions.
The Turkish lira on Wednesday dropped to as much as 41.29 to a US dollar but clawed back some of the losses to trade at 38.37 a dollar.
Economic struggles and inflation
The country has been battling with chronic inflation for the past two years, although the government’s disinflation strategy has lowered it close to 40 per cent in February after peaking at more than 75 per cent last year, according to government data.
Turkey’s economy has also struggled to maintain growth momentum despite Ankara’s push to stimulate economic activity. The International Monetary Fund expects it to expand by 2.7 per cent this year, slower than 3.2 per cent recorded last year.
There are signs of recovery and S&P Global upgraded Turkey's credit rating twice last year citing the impact of the tight monetary stance that has helped stabilise the economy.
The country's long-term sovereign credit rating was raised to BB- from B+, though its outlook was revised to stable from positive, S&P said said at the time.
if you go
The flights
Fly direct to Kutaisi with Flydubai from Dh925 return, including taxes. The flight takes 3.5 hours. From there, Svaneti is a four-hour drive. The driving time from Tbilisi is eight hours.
The trip
The cost of the Svaneti trip is US$2,000 (Dh7,345) for 10 days, including food, guiding, accommodation and transfers from and to Tbilisi or Kutaisi. This summer the TCT is also offering a 5-day hike in Armenia for $1,200 (Dh4,407) per person. For further information, visit www.transcaucasiantrail.org/en/hike/
MATCH INFO
Mainz 0
RB Leipzig 5 (Werner 11', 48', 75', Poulsen 23', Sabitzer 36')
Man of the Match: Timo Werner (RB Leipzig)
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UAE currency: the story behind the money in your pockets
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Killing of Qassem Suleimani
The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T
Price, base: Dh840,000; Dh120,000
Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo
Transmission: Eight-speed automatic; seven-speed automatic
Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm
Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm
Fuel economy, combined: 9.9L / 100km; 11.6L / 100km
UAE currency: the story behind the money in your pockets
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The biog
Name: Abeer Al Shahi
Emirate: Sharjah – Khor Fakkan
Education: Master’s degree in special education, preparing for a PhD in philosophy.
Favourite activities: Bungee jumping
Favourite quote: “My people and I will not settle for anything less than first place” – Sheikh Mohammed bin Rashid.
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The specs
Price: From Dh180,000 (estimate)
Engine: 2.0-litre turbocharged and supercharged in-line four-cylinder
Transmission: Eight-speed automatic
Power: 320hp @ 5,700rpm
Torque: 400Nm @ 2,200rpm
Fuel economy, combined: 9.7L / 100km
Jebel Ali results
2pm: Handicap (PA) Dh 50,000 (Dirt) 1,400m
Winner: AF Al Moreeb, Antonio Fresu (jockey), Ernst Oertel (trainer)
2.30pm: Maiden (TB) Dh 60,000 (D) 1,400m
Winner: Shamikh, Ryan Curatolo, Nicholas Bachalard
3pm: Handicap (TB) Dh 64,000 (D) 1,600m
Winner: One Vision, Connor Beasley, Ali Rashid Al Raihe
3.30pm: Conditions (TB) Dh 100,000 (D) 1,600m
Winner: Gabr, Sam Hitchcott, Doug Watson
4pm: Handicap (TB) Dh 96,000 (D) 1,800m
Winner: Just A Penny, Sam Hitchcock, Doug Watson
4.30pm: Maiden (TB) Dh 60,000 (D) 1,600m
Winner: Torno Subito, Sam Hitchcock, Doug Watson
5pm: Handicap (TB) Dh 76,000 (D) 1,950m
Winner: Untold Secret, Jose Santiago, Salem bin Ghadayer
'Cheb%20Khaled'
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KILLING OF QASSEM SULEIMANI
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Mubadala World Tennis Championship 2018 schedule
Thursday December 27
Men's quarter-finals
Kevin Anderson v Hyeon Chung 4pm
Dominic Thiem v Karen Khachanov 6pm
Women's exhibition
Serena Williams v Venus Williams 8pm
Friday December 28
5th place play-off 3pm
Men's semi-finals
Rafael Nadal v Anderson/Chung 5pm
Novak Djokovic v Thiem/Khachanov 7pm
Saturday December 29
3rd place play-off 5pm
Men's final 7pm
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
