‘Witch hunt’ damaging country’s economy
UĞUR GÜRSESWe are not the only country in the world whose stock exchange increased in one year from the level of 50-60,000 to the level of 90,000 and then went down to 70,000 in the past month. However, it is only us; we are the only country to start a “witch hunt” resembling the 1950s McCarthy era of America to find out “Who has made it fall?”
According to a story on the Marketwatch site, as of June 25, the stock markets in 43 out of 45 countries in the world have excessively fallen. In other words, the indexes have fallen below the average of 200 days. We are in this group. The reason we are among the biggest fallers is not measured by conspiracies but by fragility, and a little by the bad management of the Gezi protests.
The examination of stock brokers launched by Capital Markets Board (SPK) has some details with several clues: SPK has launched a vague examination. The head of SPK said the top 10 brokers who operated 95 percent of the trading volume were under examination.
In other words, there is no concrete claim, accusation or evidence present. It is meaningful that the head of the SPK said this was an examination, not an investigation. Apparently, the conspiracy belief that is dominant in the ruling party, the effort to try to find excuses for bad management of affairs, and the push to make the people believe official lies have openly put the SPK under pressure.
A second factor that reinforces that there is no concrete claim, accusation or evidence is that the identity numbers of all the staff working at broker firms have been asked. Obviously they have nothing concrete; they are looking for a potential criminal. Otherwise why would they ask for this information in a collective manner?
These questions come up: Are potential staff from broker being searched, those who can be embedded in a conspiracy? Will SPK pass this information to the security departments of the state? Will those broker firm staff and investors regarded as “suspicious” by the SPK or security units be monitored to “see what they have got”? Will phone conversations, bank accounts be scrutinized without any grounds?
While SPK is doing this, it is somewhat deaf to the call of the prime minister on citizens to prefer state banks in order to punish private banks. Could it be that listening to this speech of the strong prime minister, seeing his determination to punish private banks, some of the frightened investors sold their shares? Probably, those who took into account the developments in Japan and FED’s monetary restrictions also took this into consideration. For this reason, the Istanbul Bourse fell more compared to other countries. Now, SPK has come up with an examination of “Who sold? Who did what to us?” Exactly for this reason this is precisely a “witch hunt.”
This is a “witch hunt” because in the period scrutinized (May 20-June 19) there was more than one international development that made the stock exchange fall, and made the interest rate and foreign exchange rate jump. If they ask the Central Bank and review its balance sheet, they will see that there is almost a $3 billion exit on May 10.
Witch hunt, because research reports and background notes of brokers are also under scrutiny. Let’s say a broker wrote a negative sentence in one of his reports and said, “We expect a fall in the stock exchange,” what are you going to do? Declare him a traitor?
This kind of archaic “Let’s see what we have” examinations unique to Turkey will, in itself, damage the Turkish financial market. Investors will not like it when they are given the red carpet welcome while buying shares and at every sale, they will be pulled into the “suspicious” platform and their entire private information will be scrutinized.
Nobody should say, “So what? There is nothing to be afraid of if there was no manipulation.” What if one day a prosecutor knocks at your door and tells you, “We will search your house; let’s see if we will find a crime element,” would you like it?
Can a country where even the most innocent is concerned with “I wonder if there would be any accusations against me?” be a financial center?
Uğur Gürses is a columnist for daily Radikal in which this piece appeared on June 28. It was translated into English by the Daily News staff.