When do US sanctions on Iran move a share price?
Halkbank, 2017: deputy CEO arrested
Short answer: the warnings were very public, three years early and again one year early. The shares rose 13% beforehand.
What happened
- The action: on 2017-03-28 the US Justice Department announced the arrest of Halkbank’s deputy CEO, Mehmet Hakan Atilla, for helping Iran evade US sanctions (Justice Department release).
Warning signs before the action
- 2013-12-17: Turkish police detained Halkbank’s general manager in a corruption investigation that included breaking sanctions on Iran (Wikipedia, sourced).
- 2016-03-19: the US arrested Reza Zarrab, the gold trader whose Iran payments scheme ran through Halkbank (court complaint).
- Halkbank’s own filings: not checked.
Share price before and after
- Before the action (against the local index): +13.1% over 60 trading days, +3.9% over 20, +6.3% over 5.
- After: −13.3% after 1 trading day, −12.5% after 5, −5.0% after 20.
What this shows
- The market ignored years of public evidence and fell only when a senior Halkbank officer was arrested. Part of the fall had recovered within a month.
- Halkbank’s longer decline: from 2015 to 2019 Halkbank fell 58% while the Turkish bank index was flat. See the main report.
How we measured
- Share move: the company’s share price change minus the local index change, from daily closing prices (Yahoo Finance).
- Before: from the close 60, 20 and 5 trading days before the action, up to the last close before it.
- After: from that last close to 1, 5 and 20 trading days later.
- Data and code: case_study_summary.csv, case_study_price_paths.csv, scripts/case_studies.py.
- Saved sources: receipts/case-studies.