CHP convention lawsuit postponed: How did the markets react?

The third hearing of the lawsuit filed for the cancellation of the 38th Ordinary Convention held by the Republican People's Party (CHP) on November 4-5, 2023, was held at the Ankara 42nd Civil Court of First Instance. In the hearing, it was decided to await the finalization of the lack of jurisdiction decision rendered by the Ankara 26th Criminal Court of First Instance. The court postponed the case to September 8, 2025.

While the ongoing legal process regarding both the CHP's 38th Ordinary Convention and the 21st Extraordinary Convention had been creating political uncertainty for some time, the postponement decision from the court created relief in both domestic and foreign markets.

STOCK MARKET SOARS, CDS DECLINES

Following the announcement of the court's decision, trading volume on Borsa Istanbul increased rapidly. According to data reported by BloombergHT, the BIST 100 index started the day with a 0.51 percent increase and saw 9,615 points with a value gain exceeding 3 percent during the day.

There was a noticeable movement, particularly in banking stocks. The banking index gained over 6 percent. According to experts, investor confidence increased again as political tension temporarily subsided.

RISK PREMIUM FELL BELOW 300 BASIS POINTS

Following the decision, Turkey's 5-year credit default swap (CDS) also crossed an important threshold. The CDS fell below 300 basis points, reaching one of its lowest levels in recent months. This decline was interpreted by foreign investors as a strengthening of the perception of Turkey's financial stability.

EXPERT COMMENTS: “UNCERTAINTY DECREASED, LIRA SUPPORTED”

International markets did not remain indifferent to the development. Nick Rees, Head of Macro Research at Monex Europe, stated in his assessment to Bloomberg, “The postponement of the court decision has reduced political uncertainty in the short term. This provides temporary support for the TL.”

News Source: 12punto