MSCI Freezes Turkey Stocks Amid Manipulation Scandal — SkimNews
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- MSCI froze certain index-related changes for Turkish equity securities effective immediately and warned that without "tangible and credible progress" by June 2027, it will consider reclassifying Turkey from Emerging Market to Frontier or Standalone Market status.
- Allegations surfaced in Q4 2025 that investment firms were artificially inflating small, illiquid listed companies with low free float; Turkey's Capital Markets Board (SPK) said the investments "could not be explained by economic realities or by the financial fundamentals of the companies concerned."
- Pusula Portföy became the first asset manager to report a fund default in September, followed days later by Tera Portföy, which said two of its funds had also defaulted.
- Turkey's benchmark BIST 100 index plummeted 16.7% in September, after which SPK ordered the liquidation of 131 investment funds collectively overseeing roughly 1 trillion Turkish lira ($20.2 billion) in assets.
- On Sept. 21, Borsa Istanbul announced dozens of stocks at the heart of the scandal would be removed from the BIST 100 starting in October.
- On the same day as its Turkey action, MSCI launched a proposal to reclassify the MSCI Indonesia Indexes to "Standalone Market" status, citing "persistent opacity in shareholding structures and suspected coordinated trading behavior."
Why it matters: MSCI's June 2027 deadline means Turkish and Indonesian companies risk losing access to passive emerging-market fund flows if regulators don't crack down on coordinated trading. The damage is already material: BIST 100 fell 16.7% in September, and 131 funds managing about 1 trillion lira ($20.2 billion) were ordered liquidated.
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