EUR 229.48 For Business Accounts Only

BGC Partners: TURKEY: PRELIMINARY LOCAL ELECTION RESULTS and MARKET IMPLICATIONS

Based on preliminary results, AKP+MHP alliance appears to have lost the capital city Ankara to CHP but hangs on to about 52% of total votes. There is uncertainty on Istanbul results, indicating that all votes are likely to be recounted and official results need to awaited for the final outcome. (There is no official announcement but unconfirmed news reports quoting High Election Board that CHP leader is leading with 48.80% votes versus AKP’s 48.48%, with 99.68% of votes being counted). Regardless of the outcome of Istanbul votes, the government will remain in place, given the current parliamentary arithmetic. In his first speech after the elections, President Erdogan focused on the importance of the economy and 4-year “election-free” period. From markets’ perspective, the elections results indicate largely the continuation of “Status Quo”, with the economy taking the centre stage once again. We expect a positive response in financial markets in the aftermath of local elections.