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Turkey Bans Short-Selling in Top Banks as U.S. Indicts Halkbank

The decision comes into effect on Wednesday, according to a statement. No information was given on when the ban would end.

Turkey Bans Short-Selling in Top Banks as U.S. Indicts Halkbank

Turkey’s stock exchange “temporarily prohibited” short-selling in seven banks, including Turkiye Halk Bankasi AS against which the U.S. brought a criminal case for fraud and money laundering.

The decision comes into effect on Wednesday, according to a statement. No information was given on when the ban would end. The ban also applies to short positions closed within the same day, Capital Markets Board said in a separate statement.

Banks affected:

  • Akbank TAS
  • Turkiye Garanti Bankasi AS
  • Turkiye Is Bankasi AS
  • Turkiye Sinai Kalkinma Bankasi AS
  • Turkiye Halk Bankasi AS
  • Turkiye Vakiflar Bankasi TAO
  • Yapi ve Kredi Bankasi AS

Despite the September optimism that offered one of the best months to Turkish banking stocks this year, they still accounted for four out of 10 most popular short trades — bets that benefit from a decline in the stock — among emerging market banks, according to Markit Ltd. data.

Short sellers targeted Turkey’s state lenders Vakifbank and Halkbank the most among Turkish bank stocks. That said, short interest on Halkbank’s shares fell to 1.1% on Oct. 10, a 18 month-low, before slightly picking up toward 1.5% this week.

An indictment was filed Tuesday in Manhattan against Halkbank, accusing the state-run lender of participating in a wide-ranging plot to violate prohibitions on Iran’s access to the U.S. financial system. The conspiracy involved high-ranking government officials in Iran and Turkey, according to the indictment.

Halkbank shares have slumped 23% this year in Istanbul, heading for its second year of declines. That compares with an 11% gain for the 13-member banking index.

Turkey is in the global spotlight after it started a military operation in Syria. U.S. President Donald Trump on Monday announced a series of sanctions against the country, including raising tariffs on Turkish steel exports and sanctioning of three ministers.

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