Updated: 1-MSCI suspends Turkey index adjustments and warns of possible market rating downgrade

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Reuters, October 15 - MSCI has suspended certain adjustments to its Turkey stock index and stated that, if by mid-2027 Turkish authorities fail to make sufficient progress in addressing investors' concerns over market operations, the company may consider downgrading the market's rating.

The Turkish stock market has been closely watched by investors due to how free float shares are calculated and suspicions of coordinated trading in some stocks.

The index provider said the suspension takes immediate effect and will remain until further notice.

MSCI stated it will continue to monitor the market and seek investor feedback. If there is no significant progress by June 2027, the institution may begin a consultation process on reclassifying the Turkey market from emerging market to frontier market or standalone market.

Institutional investors have raised concerns that coordinated trades might occur through fund holdings related to some small listed companies; MSCI said this undermines confidence in estimating free float shares in the market.

"Institutional investors need to see credible and sustained enforcement actions against coordinated trading, as well as disclosure standards that allow independent verification of the free float shares of Turkish securities," MSCI said.

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