Borsa Istanbul amends index-wide circuit breaker rule

Borsa Istanbul amends index-wide circuit breaker rule

The Capital Markets Board of Türkiye (SPK) is considering lifting the short-selling ban on Borsa Istanbul by the end of August, according to a Bloomberg report [1]. The move comes as the Turkish market has shown signs of stability and record-breaking performance in recent weeks.

The short-selling ban, initially imposed in March amid a market downturn, is set to expire on August 29. The SPK is reportedly considering not extending the ban, allowing investors to bet on falling prices. This move is anticipated particularly by foreign investors, who hold $33.7 billion in Turkish stocks, accounting for 43% of the total portfolio value [1].

Since early June, the Turkish central bank has signaled plans to ease liquidity conditions for the markets. This has prompted a prolonged rally in Turkish stocks, with the benchmark BIST 100 index surging by over 26% during the period. The index closed last week at an all-time high and started this week in a fresh record zone above 11,500 [1].

The return of foreign inflows into the Turkish market has also been significant. According to central bank data, since April 18, the net change in foreign holdings of Turkish stocks has surpassed $2 billion year-to-date, with inflows continuing for eight consecutive weeks as of August 15 [1].

The short-selling ban was first introduced in February 2023 following the February 6 earthquakes. The SPK later lifted the ban for companies in the BIST 50 index starting in 2025. However, on March 23, 2025, the SPK announced that the short-selling restriction in Borsa Istanbul’s equity markets would be extended until the end of trading on April 25, 2025. The ban was later extended again on June 27 until the close of trading on August 29 [1].

References:
[1] https://www.turkiyetoday.com/business/turkiye-likely-to-lift-short-selling-ban-on-istanbul-stocks-by-end-of-august-report-3205892