Monday 30th March 2015,
Turkish Market News

Taylor Rule in Turkey

Taylor Rule in Turkey

Has the Turkey’s monetary policy been sufficiently tight? This question becomes extremely crucial especially after the Turkish politicians’ blistering attack on the central bank that have raised the concerns about the independence of Turkish central bank. Amid these concerns Turkey central bank has cut the rates twice in 2015 bringing its policy rate from 8.75% [...]

March 27, 2015 Oguz Erkol Macro View 0

The Real Effects of External Debt on Turkey

The Real Effects of External Debt on Turkey

One basic problem of Turkish economy is that the large current account deficit which is expected to equal to 4.5% of total Gross Domestic Product at the end of this year. When this is the case, the short term capital inflows and foreign direct investments (FDI) in the country becomes crucially important (Recently we published [...]

March 12, 2015 Oguz Erkol Macro View 0

Do Turkish Dividend Stocks Outperform in Bear Markets

Do Turkish Dividend Stocks Outperform in Bear Markets

It is not a secret that dividend-paying stocks often come out ahead during a market sell-off. Because many investors are attracted to the safety appeal of them. As Turkish stock market is hanging around record high levels with foreign capital outflows on the horizon due to expected rate hikes by the US Federal Reserve, it [...]

February 20, 2015 Oguz Erkol Equities 0

Determinants of Bank Profitability

Determinants of Bank Profitability

Examining the determinants of the banks profitability is very important in any economy as these foundations perform key financial functions. In Turkey it is even more important considering the fact that the stock market is heavily dominated by the banks. See here, here and here for more about the bank-intensive style of Turkish financial markets. [...]

February 10, 2015 Oguz Erkol Equities 0

A Historical Analysis of Turkish Bank Stocks

A Historical Analysis of Turkish Bank Stocks

As I noted earlier, Turkish stock market is mostly driven by a bunch of large-cap bank stocks with high levels of trading activity. Under these circumstances, developments in the industry becomes crucially important for any investor holding Turkish assets. Hereby, my aim is to mention some important points by using some valuation metrics in historical [...]

January 30, 2015 Oguz Erkol Equities 0

Central Bank Independence Attacked Again

Central Bank Independence Attacked Again

The 2001 crisis and the following the post-crisis period were important milestones for economic policy-making in Turkey as well as for the monetary policy. In 2002 Turkish Central Bank adopted a modern monetary policy with primary objective of achieving price stability after the bank had been vested with instrument independence in the previous year. Thanks to [...]

January 19, 2015 Oguz Erkol Macro View, Politics 0

Sluggish Credit Growth: A Cause for Concern?

Sluggish Credit Growth: A Cause for Concern?

The evolution of Turkey’s banking system in early 2000s was a lesson to be learned for any emerging countries, even for the developed ones. Following the 1994 crisis, Turkish financial system had come to settle in a fuzzy equilibrium with a large nominal stock of carried by a handful of banks in a lucrative “carry [...]

December 17, 2014 Oguz Erkol Macro View 0

The Outlook of Foreign Direct Investment

The Outlook of Foreign Direct Investment

Turkey is running a large current account deficit and is a big borrower from abroad as the deficit roughly accounts for 6% of the country’s total GDP and short-term foreign debt stock hits $130 billion. Under such circumstances foreign capital would suppress the rising concerns around the country’s debt. However, Turkey seems to be less [...]

December 4, 2014 Oguz Erkol Macro View 0

Turkish Banks: An Overview of Funding Trends

Turkish Banks: An Overview of Funding Trends

After focusing on expectations, risks and valuations in Turkish banks, here the funding trends across the industry becomes the theme of this post. In the above-mentioned post, we showed that much faster rise in loans compared with domestic savings rates would be creating liquidity and funding risk for the banking system. At the end of [...]

November 5, 2014 Oguz Erkol Equities 0

Turkish Banks: Expectations, Valuations & Risks

Turkish Banks: Expectations, Valuations & Risks

Expectations Over the past two months we have seen earnings upgrades coming to an end in most emerging market as well as in Turkey. Specifically, for Turkish banks, consensus lowered next year’s earnings estimate by a considerable 0.7%, bringing the cumulative cut to 1.5% since mid-August. Still, analysts averagely estimate an earnings per share growth [...]

October 31, 2014 Oguz Erkol Equities 0