Turkish Construction Firms Tumble After Opposition Election Win

(Bloomberg) -- Construction firms fell sharply in Istanbul on Monday after Turkey’s ruling party suffered an unprecedented defeat in municipal elections, making it less likely for government-backed mega projects to materialize.

Most Read from Bloomberg

State-run REIT Emlak Konut GYO AS fell as much as 9.8% to 8.99 liras, its biggest decline in a year. The firm, formerly headed by governing AK Party’s Istanbul mayor candidate Murat Kurum, pulled the 48-member Borsa Istanbul REITs index down as much as 4.5%.

Kurum’s election promises included building 650,000 new housing units but instead opposition mayor Ekrem Imamoglu extended his mandate for another five years with an 11 percentage point margin.

Read more: Erdogan Suffers Historic Loss in Turkey Municipal Elections

The election outcome also weighed on cement makers with Istanbul-based Bogazici Beton Sanayi Ve Ticaret AS falling as much as 10%. Akcansa Cimento AS, another major cement-maker in Turkey’s largest city, dropped more than 6%.

“Such moves are rather short-term and psychological, likely driven by retail investors,” said Haydar Acun, managing partner at Istanbul-based portfolio manager Marmara Capital. “There probably was some expectation that a positive outcome for the ruling party would support a construction drive,” he said.

Turkey’s benchmark Borsa Istanbul 100 index was down by 1.7% as of 1:07 p.m. local time, with 84 of the shares falling and 16 rising.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.