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Turkey's Markets Upbeat Following Key Vote on Constitutional Changes

17 Apr 2017 7:38 am

By Yeliz Candemir

ISTANBUL--Turkish markets rallied Monday as investors cheered President Recep Tayyip Erdogan's victory in a close vote on constitutional changes that would concentrate more power in his office, while opponents said they would challenge the outcome.

According to unofficial results, Turkey approved constitutional amendments with a tight "yes" vote garnering 51.2% of the vote, and 48.8% opposed, with 100% of the ballots counted, the state-run Anadolu news agency reported Sunday. The referendum was marred by allegations of fraud, with opposition leaders vowing to demand a recount. Opponents of Mr. Erdogan on Sunday night were massed in protest in Ankara, the capital, even as supporters of the president were holding congratulatory demonstrations elsewhere in the city.

Turkey's currency, the lira, strengthened by as much as nearly 3% to 3.6371 against the dollar Monday, its strongest level in two weeks, as investors and analysts predicted less political uncertainty after Sunday's referendum. The currency slumped nearly 4% against the dollar year to date, after it plunged as much as 10% against the greenback in January, making it the world's worst-performing currency with a slowing economy and political uncertainty.

Turkey's main BIST-100 stock index opened 0.74% higher at 90,731 points.

"Following this result, we expect a brief relief rally in Turkish assets as the huge uncertainty associated with a 'no' vote has been averted," said Tatha Ghose, an analyst at Commerzbank. "But, such moves are unlikely to last for long. Markets are likely to turn their focus back on Turkey's bigger political challenges--its relation with the U.S. and Russia, the challenges at the Kurdish border, and its relations with the EU."

Mr. Erdogan and his supporters have described the results as the will of the people. He is scheduled to hold a Cabinet meeting Monday and other ministers appeared to be keeping to their normal working schedules.

International observers that monitored the referendum are scheduled to give a preliminary summary in Ankara of their reports on the election. Some members of the European parliament who were in Turkey to monitor the election Sunday have reported several allegations of violations and irregularities, supporting the Turkish opposition's contention of an unfair vote.

Speaking to the nation late Sunday, Mr. Erdogan called his win an expression of the national will after a bitterly fought race that essentially became a referendum on his political legacy. His supporters turned out in droves, spurred by the allure of his policies that blend social conservatism and Islam with electoral democracy, as well as a populist dedication to modernizing health care and social services.

Opponents of the changes had argued otherwise. They believe the constitutional changes would deliver a serious blow to a democratic system already under intense strain and set Turkey on a path to authoritarianism. They complained that the campaign has been unfair in part due to the restrictions caused by the continuing state of emergency called after last summer's failed coup. Since then, authorities have arrested more than 40,000 people, including dozens of opposition lawmakers and local elected officials, dismissed more than 120,000 civil servants and other government employees and closed roughly 140 media outlets.

Write to Yeliz Candemir at yeliz.candemir@wsj.com

(END) Dow Jones Newswires

April 17, 2017 03:38 ET (07:38 GMT)

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