Sunday 20th April 2014,
Turkish Market News
Spotlight

On the Failure of Inflation Targeting

On the Failure of Inflation Targeting

Right after the shocking rate hike by Turkish Central Bank and the elections that is thought to have removed the political risk, we began to see Turkish lira not under pressure anymore, unlike the central bank. Firstly, let us remember the deep thoughts Turkey’s Finance Minister on the economy, SIMSEK SAYS TURKEY ‘WON’T WASTE THIS [...]

April 16, 2014 Oguz Erkol Macro View 0

Political Risks Over? Not Yet

Political Risks Over? Not Yet

Concerns about Fed over-optimism admission and shortening the time from taper to rate-hike somehow did not spark a major risk-off dump in Turkish equities. Equities are traded just below the previous day’s close while major banks such as Halk, Is, Vakif, Yapi are in green territory. Meanwhile bonds are having a bad day as 2-year [...]

March 20, 2014 Oguz Erkol Macro View 0

Averting Bond Losses with Accounting Twist

Averting Bond Losses with Accounting Twist

In the world of finance is a simple fact that your bonds will lose value when interest rates go up. But the consequences of that fact are all over the place when it is a bank holding the bonds. When banks own bonds in their trading portfolio, they have what is colloquially called a trading [...]

March 3, 2014 Oguz Erkol Business Reports, Macro View 0

Turkish Banks: Solvent but Illiquid?

Turkish Banks: Solvent but Illiquid?

One of the major roles of banks is to channel funds from savings into valuable projects. In doing so, banks engage in liquidity and maturity transformation, since they finance long-term, illiquid project while funding themselves with short-term, liquid abilities. By performing this important role, banks expose themselves to the risk of runs. Turkish banks have [...]

February 24, 2014 Oguz Erkol Business Reports, Macro View 0

Industrial Output Confirms Modest Growth

Industrial Output Confirms Modest Growth

It was last Friday when Standard and Poor’s cut Turkey’s outlook to negative with affirming its notch at BB+ one step sohrt of the investment grade. The credit rating agency also saw risks of a hard landing. Today we have the yearend number industrial output number suggesting that growth continues at moderate pace. Seasonally and [...]

February 10, 2014 Oguz Erkol Macro View 0

Real Returns Might Keep Lira Attractive

Real Returns Might Keep Lira Attractive

In a previous post, we refereed to depositors losing confidence in lira. This has been the main reason behind the weakness of lira. Because it is clear that there has not been any capital outflow enough to cause a dramatic decline in lira, it was the jump in residents’ foreign exchange deposits that has destabilized [...]

February 4, 2014 Oguz Erkol Macro View 0

Are Rates Still Low Despite The Massive Hike?

Are Rates Still Low Despite The Massive Hike?

The whole world was shocked when Turkish Central Bank raised its policy rate to 10% from a lending rate of 7.75%. Market reacted quickly to this massive hike. We saw lira abruptly gaining value and flirting with 2.17 against dollar, EEM (iShares MSCI Emerging Markets ETF) rallied an so on. But the question still remains. [...]

February 3, 2014 Oguz Erkol Macro View 0