Economist Güldağ: Remaining 47 Funds 'Carry High Weight in Total', Solution Won't Be Easy

Although the first wave of the liquidation process in Turkey's fund crisis has been completed, the main burden still awaits resolution. Hakan Güldağ, Chairman of the Board of How An Economy, made assessments on CNBC-e.

According to Güldağ, Treasury and Finance Minister Mehmet Şimşek stated in his presentation to the Parliamentary Planning and Budget Commission that the Capital Markets Board (CMB) had decided to liquidate 131 funds, which contain 456 thousand investors. Şimşek also disclosed that within the funds undergoing liquidation, approximately 3 thousand real sector companies hold a total investment of 116 billion lira.

Güldağ noted that the liquidation of a portion of the 131 funds has been completed, but 47 funds remain, stating: "The weight of these 47 funds in terms of total value is very high. It won't be that easy." Recalling the magnitude at the onset of the crisis, Güldağ said that initially approximately 20 billion dollars was cited, with this amount being around 800 billion lira, adding: "It would not be wrong to say that the bulk is still in the bag."

Güldağ noted that the liquidated portion consisted primarily of Treasury bonds and BIST 30 shares, saying this section had been paid. Conducting a calculation based on 3 thousand companies for the remaining burden, Güldağ said that when 116 billion lira is divided among 3 thousand companies, "it comes to around 38 million lira per company on average." Mentioning that some funds had 28 thousand participants and that the average portfolio size remained below 100 thousand lira, Güldağ emphasized that small investments have been paid but large amounts have yet to be resolved: "A person invested 38 million lira and received 250 thousand lira. This doesn't mean the problem has been solved."

Güldağ also noted that the fund crisis has created additional pressure on companies using share collateral, explaining that as share values declined, banks have demanded additional collateral. Citing Istanbul Chamber of Commerce President Şekib Avdagiç's assessment that the fund crisis has created serious sensitivity regarding payments and access to financing, Güldağ said: "The economy has become more strained with the fund crisis."