Turkey Vote Revives Gulen-Linked Stocks as Rest of Market Slumps

Updated on

As Turkish stocks tumbled after the general election, some had their biggest gains in weeks.

Gold miner Koza Altin Isletmeleri AS jumped 7.6 percent, the most since Feb. 26, and sister company Ipek Dogal Enerji Kaynaklari AS posted the highest close since May 21 as investors speculated stocks associated with a U.S.-based Islamic cleric will benefit from a weakening of President Recep Tayyip Erdogan’s power.

The companies were among only six in the 100-member equity benchmark to gain after the ruling AK Party, which Erdogan led for more than a decade before becoming president, failed to win a majority needed to form a government. Koza Altin was battered the past two years in part by its association with Fethullah Gulen, whom Erdogan has accused of being behind a “parallel state” in Turkey.

“The AK Party will likely tone down its rhetoric as it will need to be in a coalition, and that will damp its authoritarian tendencies,” William Jackson, an analyst at Capital Economics Ltd. in London, said by phone. “It was clear in the run-up to the election that the AK Party had been very critical of the Gulenist movement, and that companies linked to this were being attacked or denied business opportunities.”

Ipek Enerji climbed 8.6 percent, the most in almost a week, and Koza Anadolu Metal Madencilik Isletmeleri AS, owned by Ipek, jumped 11 percent by the close in Istanbul. Meanwhile, the Borsa Istanbul 100 Index slid 5.1 percent.

Asya Bank

Shares of Islamic lender Asya Katilim Bankasi AS, which was seized by the Savings Deposit Insurance Fund and accused by Erdogan on June 2 of funding the Gulenist movement, rallied 11 percent, taking its four-day advance to 49 percent.

Erdogan said on Monday that no party will be able to rule the country alone and that all sides must act “responsibly” to preserve a climate of stability, confidence and democratic gains.

Koza said last year that authorities had been withholding permits from its companies, halting production at three mines. While Chairman Akin Ipek said in December that he’s not a “financier or supporter of anyone,” he described Gulen as his source of “inspiration” in a Wall Street Journal story 11 months earlier.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE