Industry Updates

HSBC AM briefly suspends Turkey ETF following major earthquake

BlackRock did not halt trading on its Turkey ETF

Theo Andrew


HSBC Asset Management briefly suspended its Turkey ETF earlier this week after Borsa Istanbul halted trading on several companies based in the region hit by a huge earthquake on Monday.

The HSBC AM MSCI Turkey UCITS ETF (HTRD) issued a notice to shareholders telling them of the temporary suspension of dealing as the Turkish stock exchange was left “unable to trade” following the earthquake in south-eastern Turkey, near the Syrian border.

Almost 10,000 people are known to have died in Turkey and neighbouring Syria following the two earthquakes, with the World Health Organisation estimating the total number of people to be impacted to be over 23 million.

Borsa Istanbul trigged a market-wide circuit breaker on the morning of 7 February, halting trading in its equities as markets slid by 5%.

It followed the suspension of trading on several shares in the region struck by the earthquake on Monday, with more added to the list throughout the day.

Despite this, BlackRock, which runs the iShares MSCI Turkey UCITS ETF (ITKY), did not halt trading. Daily trading volume for ITKY was double the average at $2.7m on Tuesday while spreads remained tight.

It was not clear if Amundi, which runs the only other Europe-listed Turkish equity ETF – the Lyxor MSCI Turkey UCITS ETF (TUR) – suspended its ETF following the news.

The French asset manager did not respond in time for publication.

Turkish stocks have been falling out of favour with investors in recent years, however, the country’s stock market saw significant gains in 2022 as local retail investors poured their savings into the market.

Leading the way was Lyxor’s TUR with 89% returns in 2022, followed by HTRY and ITKY which returned 86.5% and 85.6%, respectively.

Investors flocked to the market in part to avoid the rampant inflation seen in the country which peaked at 84.1% in November last year.

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