The presidential and parliamentary elections on May 14 are critical for the future of Turkey. And they probably will have a significant impact on the stock market as well.
In the past, most elections created uncertainty and volatility. The market significantly declined before the 2002, 2007, and 2015 elections. The market rallied after the 2011 and 2018 elections, after AKP, a party seen as pro-business was elected.
Therefore, the market declined before most elections, especially when there was great uncertainty about the country's future. The election this year is probably more significant than any other and the uncertainty is much greater. So, I expect a decline in the stock market before the election as investors will want to have more cash reserves.
The market's reaction after the election depends on the result. I don't think markets will rally as they did in the previous election when AKP and Recep Tayyip Erdogan were elected. Because their image in the international community declined significantly since then. Last month, 'The Economist' called them Turkey's looming dictatorship.
Comments