Examining the financial effects of boycotting Israel: Event-study and modern portfolio theory approaches with data from Borsa Istanbul

This study evaluates how the current Israel boycotts affect Borsa Istanbul. An event study in a 45-day window around 7 October 2023 tests abnormal returns for a value-weighted portfolio of 22 boycotted firms using four models (Market, Market-Return, Constant-Mean, CAPM). All detect a clear one-day price hit, though magnitudes vary. For longer horizons we re-create the BIST 30, BIST 100 and Participation 30 indices without the boycotted stocks and follow them to 31 December 2024. Sharpe, Sortino, Treynor and Jensen metrics drift modestly higher, and the revised indices edge ahead in cumulative return, but significance tests give mixed signals. Overall, boycott targets suffer a short-run valuation loss, while indices that exclude them record slightly better risk-adjusted performance over the next year.