Société Générale said it was resuming commentary on Turkey after reviewing new legislation that threatens up to five years' imprisonment for certain types of commentary on financial markets.
Turkey's Capital Markets Law, enacted on December 31, stipulates punishment for "those who provide untruthful, wrong or misleading information, start rumours, or provide news, commentary, or prepare reports with the intention of influencing prices, values of capital markets instruments or investor decisions".
Bank of America Merrill Lynch and Commerzbank said they were reviewing how the new law would affect their business in Turkey.
"After seeking advice we're quite comfortable that the new law doesn't affect normal research activities and are therefore comfortable covering markets as we have done in the past," said Benoit Anne, the head of emerging-markets strategy at Société Générale in London.
While the new legislation outlaws market manipulation, it risks reducing the quality of financial information available to investors, said Isik Okte, a strategist at the investment unit of the state-run Türkiye Halk Bankasi in Istanbul.
"I am going to be much more careful in what I say or don't say from now on," Mr Okte said. "Strategists and economists will be worried about going to jail for saying something if it moves the markets, so they will shut up."
Commerzbank has called off analyst trips to Turkey "until the law has been clarified", said Tatha Ghose, a London-based economist at the bank.
Arko Sen, a debt and currency strategist at Bank of America in London, said that he had asked the compliance team to review the law.
International criticism of Turkey's record on free expression intensified last year. The New York-based Committee to Protect Journalists said in an October report that Turkey had the most reporters imprisoned of any nation and that the prime minister, Recep Tayyip Erdogan, was leading "one of the biggest crackdowns on press freedom in recent history".
The European Commission expressed "serious concern" over the rising number of court cases related to freedom of expression, in a report published the same month.
The new law was probably meant to target people who manipulated security prices with misleading information, said Slim Feriani, the London-based chief investment officer of Advance Emerging Capital. Policymakers probably were not trying to restrict local institutions or foreign investors, he said.
* Bloomberg News