The likely scenarios following Turkey's Sunday vote

Most polls in Turkey predict another hung parliament following Sunday's election. According to the most recent polls, AKP actually stands to lose further compared with the June election, obtaining only 251-254 seats versus the 258 seats won in the June election. 

The number of seats would be far below the 276 majority threshold in parliament. Hence, if the polls are right, an outright AKP majority or minority-led government is quite unlikely in our view. 

According to Danske Bank, there are three possible outcomes:

• Outright AKP majority or minority government (unlikely).
   
• Some kind of coalition between AKP and one of the opposition parties (somewhat likely).
   
• Continued political stalemate and another election (somewhat likely).

The main opposition party, CHP, is predicted to win additional seats compared to the June election. A coalition between the AKP and CHP with a strong economic team would be regarded relatively favourably by investors. 

The political parties will be under pressure to break the political stalemate and form a coalition. The latest indications from the two main political powers, AKP and CHP, suggest increased willingness to compromise and we see that as the most plausible coalition outcome.