On Monday Turkey's High Election Board confirmed that the country's two leading candidates from Sunday's election will hold a runoff vote in two weeks, after neither incumbent Recep Tayyip Erdogan nor top opposition candidate Kemal Kilicdaroglu broke past the 50% threshold needed to win outright in the first round.
Erdogan and his AK party's allies are expected to retain a parliamentary majority as a result of the Sunday elections, which saw some of the highest voter turnout in the nation's history. Turnout was 89% of eligible voters. With 100 percent counted, Erdogan captured 49.5% of the vote - which is significantly better than even pre-election polls predicted - compared to Kilicdaroglu's 44.9%.
As we noted previously, real surprise - and disruptor for both sides - was a third candidate, Sinan Ogan of the ultra-nationalist Ancestor Alliance. He took 5.2% of the vote and and prevented an outright win for either of the two leading candidates. Will Ogan endorse Erdogan or Kilicdaroglu in the runoff? This could be a major factor in determining the outcome in two weeks (May 28).
As Axios reports of Ogan, "He has said he would only consider endorsing Kılıçdaroğlu if the opposition leader promised not to make any concessions to a pro-Kurdish party. However, Kılıçdaroğlu needs Kurdish support to have any chance of victory."
But it remains that "Erdoğan will be heavily favored in the runoff given his advantage in the first round and the likelihood that conservative Oğan voters could back him in the second round."
And summarizing some of the opposition claims throughout Sunday evening that state media was intentionally skewing and manipulating results as they came in, Axios writes further:
Kilicdaroglu in a late Sunday speech charged Erdogan with "blocking the will of Turkey" - which is a preview of the political fighting and chaos to come of the next two weeks:
Kemal Kilicdaroglu has said that the Erdogan camp keeps objecting to the results from certain ballot boxes to block the system.
“There are ballot boxes that have been objected to six times, 11 times,” he said, adding: “You are blocking the will of Turkey.”
Kilicdaroglu said: “You cannot prevent what will happen through objections. We will not allow a fait accompli.”
According to the resulting jitters through Turkish markets, Bloomberg observed Monday morning as the world woke up to news of the final tally, "Government bonds fell as the cost of insuring against default rose, while Turkey’s benchmark stock index sank 7% at the open." Further, "The lira also traded lower even as state banks intervened to hold the exchange rate at around 19.65 per dollar, people familiar with the matter said." On the next two weeks of uncertainty looming, Ogeday Topcular, a money manager at RAM Capital SA was quoted as saying:
And for more observation on market reaction via BFW (Bloomberg First Word):
Hasnain Malik, a strategist at Tellimer in Dubai
Richard Segal, a fixed-income analyst at Ambrosia Capital Ltd.
Simon Harvey, head of FX analysis at Monex Europe
Piotr Matys, senior currency analyst at In Touch Capital Markets in London
Henrik Gullberg, macro strategist at Coex Partners Ltd
Ipek Ozkardeskaya, senior analyst at Swissquote