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TURKEY - In Brief 01 Nov 2015 by Murat Ucer

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Hi All: Murat here, filling in for Atilla Yesilada, sharing very briefly his first impressions on today’s AK Party victory. Facts: According to the preliminary results, AK Party won, quite unexpectedly, some 49% of the votes, winning around 312 seats in parliament, up from 258 in June (see table at the link below that has the last three election outcomes). This is sufficient to form a single-party government (i.e. it is above 276 seats), but short of the 330 seats needed to drive a decision to a referendum or the 367 seats that are needed to singlehandedly change the Constitution. A simple comparison to June outcomes suggests that AK victory is primarily driven by a remigration of HDP and even more importantly MHP votes, back to AK, with the latter (MHP) coming out as the biggest loser of these elections. CHP's standing was more or less stable vis-a-vis the June elections. Table.docx Reasons: Basically, it was all about the Kurdish issue then (i.e. at the June 2015 elections), and it still is now: after a horrific, terror-ridden few months, Turkish voter seems to have migrated back to AK (from both MHP and HDP), in search of security and stability, ignoring the grander issues like the economy, media freedoms, human rights issues and so on. Markets: As to what this means for markets, I would like to refer you all to my colleague Atilla’s thoughts that were fleshed out in the Weekly Tracker of October 25th -- with which I very much concur. A positive reaction in the very short term notwithstanding, things are likely to get complicated in the medium-run, with President Erdogan re-exerting his control over the party, continuing his drive toward Executive Presidency, with t...