Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

Update 7: The election, at least according to the state-run media, is over.

  • *TURKEY’S STATE-RUN TRT WORLD SAYS ERDOGAN HAS BEEN RE-ELECTED: BBG

According to another state-run news agency, Anadolu, with 92% of ballot boxes opened reporting, Erdogan leads with 53%; hi competitor, CHP’s Muharrem Ince follows with 30.6%. Anadolu also has Erdogan’s AKP-MHP alliance winning 54% in the parliamentary race.

Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

Meanwhile, the opposition continues to challenge the initial results:

  • TURKEY CHP’S TEZCAN SAYS CHP TO FOLLOW THE DATA UNTIL MORNING
  • TURKEY CHP’S ADIL SECIM SAYS DATA YET TO COME FROM LARGE CITIES
  • TEZCAN SAYS ELECTIONS BOARD DATA HAS 46% OF TURKEY BALLOTS OPEN

We expect the opposition to further complain and claim the election was rigged – probably with reason – we doubt it will have much success in swaying the final result or obtaining a revote.

What happens next?

Erdogan wasted no time in claiming a premature victory, stating the unofficial results show him winning, that his alliance is also winning the majority in the parliament, and that no one should try to overshadow the results of the election. 

“Our nation has given me the responsibility of the presidency and executive power. In the same manner, [the nation] has imposed a great responsibility in legislation on Public’s Alliance and the AK Party.”

He also said that Turkey should leave election tension behind, and that Turkey’s dedication on improving rights and freedoms will continue,

In other words, by having stated that he won, he has defacto written the narrative.

And while official results will likely be announced several days later but the election board is expected to post temporary results sometime tonight at which point Erdogan will likely remain president.

* * *

Update 6: How will markets react to another outright victory for Erdogan? Here is Bloomberg’s  Marcus Ashworth echoing what we said last night:

An Erdogan victory at least removes the uncertainty that has dogged Turkish markets this year and is probably positive for the lira. Nonetheless, if he makes good on his comments last week to take back control of interest rates then any relief rally might be short-lived. A reversal of any of the 500 basis points of central bank rate hikes seen since late April would be toxic for the currency. The lira will not recover much until Erdogan confirms the central bank is in total control of interest rates in the battle to tame runaway inflation.

And now that Erdogan is back in full control, that is unlikely to happen.

* * *

Update 5: Greece, Hungary, Guinea, Venezuela officials have called Turkey’s Foreign Minister Mevlut Cavusoglu to congratulate him on the results, Bloomberg reports citing a statement from foreign ministry.

* * *

Update 4: According to the latest AA results, Erdogan is assured to become Turkey’s 13th president.

With 80% of ballot boxes opened in presidential election:

  • Erdogan at 54.4%
  • Ince at 29.8%
  • Aksener at 7.5%
  • Demirtas at 7.2%
  • Karamollaoglu at 0.9%
    • *

Update 3: according to Bloomberg’s Onur Ant, a small crowd of Erdogan supporters began gathering in front of the ruling party AKP’s headquarters in Ankara. “Looks like Erdogan is preparing for a party.”

And indeed, with over 70% of the vote counterd Europe Elects predicts that Erdogan wins an absolute majority in the first round with 52% of the vote, leaving 31% to his challenger Ince.

    • *

Update 2: The two counting agencies (one close to government, one close to opposition), show different interim results for Presidential election. Reason might be that they receive results from different polling stations.

Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

Meanwhile, as Bloomberg summarizes, according to the latest results by state-run Anadolu Agency, Erdogan wins the presidency and his alliance secures the majority in the parliament:

A little over 68% of ballot boxes opened in presidential election:

  • Erdogan at 55.28%
  • Ince at 29.3%
  • Aksener at 7.47%
  • Demirtas at 6.84%
  • Karamollaoglu at 0.92%

Over 55% of votes counted in parliamentary election, according to AA:

  • AKP+MHP alliance at 56.86%
  • CHP+IYI+Saadet alliance at 32.01%

Individually:

  • AKP at 45.1%
  • MHP at 11.76%
  • CHP at 20.96%
  • IYI at 9.65%
  • Saadet at 1.4%
  • HDP at 9.76%

* * *

Update: with just over half of the vote counted, AA reports that Erdogan’s now has 56.6% of the vote, while his challenger Ince is at a modest 28.6%, an outcome which absent some dramatic changes in the next few hours, assures a landslide victory for Erdogan.

Separately, in the parliamentary election, AA reports that with over 37% of ballot boxes opened:

  • AKP+MHP alliance at 59.24%
  • CHP+IYI+Saadet alliance at 30.08%

Individually,

  • AKP at 47.07%
  • MHP at 12.17%
  • CHP at 19.38%
  • IYI at 9.31%
  • HDP at 9.09%
  • Saadet at 1.4%

Meanwhile, as noted earlier, Erdogan challenger, CHP candidate Muharrem Ince tweets about allegations against state-run Anadolu Agency:

Anadolu Agency is manipulating the results. It’s publishing the results from places where Erdogan gets higher vote first. I am asking our observers to keep their morale high and not abandon ballot boxes.

To address manipulation concerns, opposition parties and NGOs deployed up to half a million monitors at ballot boxes to ward against fraud. They have said election law changes and fraud allegations in the 2017 referendum raise fears about the vote’s fairness.

Erdogan, naturally, said there had been no serious voting violations.

* * *

It’s normal at this point in the counting for Erdogan’s lead to look large as his strongholds typically announce results earlier, and sure enough he does, according to live updates from Bloomberg…

With 27% of the ballot boxes opened in the presidential election, according to state-run news agency Anadolu, Erdogan has a commanding 58.33% of the vote (Ince at 27.28%, Aksener at 7.58%, and Demirtas at 5.69%) which means no second round of voting (since Erdogan’s count is greater than 50% (which is considerably better than expected).

And with 11.9% of votes counted in parliamentary election, according to Anadolou, Erdogan’s AKP has 51.9% of the vote (MHP at 13.1%, , CHP at 15.6%, IYI at 8.50%, and HDP at 7.33%).

So it looks like a done deal, right? Maybe not: Opposition party CHP’s co-head Bulent Tezcan in live press conference in Ankara, says state-run news agency Anadolu is completely making up numbers.

“We’re chasing them closely. They are caught red-handed,”Tezcan says.

“Erdogan’s vote in the presidency has so far not exceeded 48 percent even once,” CHP’s Tezcan says. Some 9,638 ballot boxes have reported results so far. Erdogan’s share is 46.6 percent and Ince is trailing him with just above 40 percent, Tezcan says.

So, to sum up, as expected, there is a huge discrepancy in vote tallies, with the CHP accusing the government of ballot stuffing, and claiming Ince is the real winner.

Anadolu Agency currently shows Erdogan at 57% with 38% of ballot boxes reporting.

The opposition CHP is saying in a press conference now that its parallel vote tally has never had Erdogan at above 48%.

CHP has Erdogan at 46.6% now — and they say the opposition’s going to win this one.

Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

Furthermore, such discrepancies are not unusual, as Bloomberg’s Constantine Courcoulas notes, here’s something to put the results reported so far by the state-run Anadolu Agency into perspective.

In the 2017 referendum, with 31 percent of ballots opened, President Recep Tayyip Erdogan’s “yes” camp” had secured 61.77 percent of the vote.

By the time 97.09 percent had been opened a few hours later, that had dropped to 51.42 percent.

As a reminder, for financial markets, each of the likely outcomes comes with associated risks.

In the past, Turkish assets have responded positively to political events that were perceived as increasing political stability, while responding negatively to political instability (Exhibit 2).

Exhibit 2: Asset prices tend to react positively to the perception of political stability in the short run

Turkish asset prices one day/week after political events

Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

Source: Goldman Sachs Global Investment Research

Viewed from this perspective, a win for the AKP in both the presidential and parliamentary elections would be the most stable outcome. However, President Erdogan’s comments on monetary policy during the election campaign – advocating lower interest rates and indicating that he would play a more active role in monetary policy – have raised concerns over the future direction of monetary policy in the event of this outcome.

Though one glance at the current state of Turkish stocks, debt, and FX signals this is a considerable concern…

Erdogan Reelected As President Of Turkey According To State-Run Media, Opposition Claims Manipulation

A split government (with Mr. Erdogan as President and the opposition obtaining a majority in parliament) would likely represent the most negative outcome for Turkish assets, in our view, as it would imply political instability and high levels of uncertainty over the future direction of monetary policy.

An opposition victory in both elections would also bring significant challenges, not least the task of forming a new government and agreeing on a cohesive legislative programme. However, under the assumption that these challenges can be overcome, we would expect it to be the most market-friendly scenario in the medium term.
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