Friday 22nd May 2015,
Turkish Market News

Are More Rate Cuts on the Way?

Are More Rate Cuts on the Way?

After Turkish lira bounced back from its record low of 2.74 to 2.58 versus the US dollar, it is stated by some pundits that more rate cut may be on the way from Turkish central later this year with a scenario of serious slowdown in economic activity. On its May meeting the central bank decided [...]

May 21, 2015 Oguz Erkol Macro View 0

Scary Istanbul House Price Boom

Scary Istanbul House Price Boom

There is a rising concern that house prices in Turkey are increasing at an unsustainable rate. According to the Turkish Central Bank’s data, Turkish house prices have consistently grown for the last several years. The chart below shows the rise in inflation adjusted housing prices in the country and specifically in three of the country’s [...]

May 8, 2015 Oguz Erkol Macro View 0

2014 GDP Growth: Underwhelming

2014 GDP Growth: Underwhelming

Turkey’s Gross Domestic Product expanded 2.6% in 4Q14, higher than the market consensus of 2.1%, bringing full year growth to 2.9%, compared with an upwardly revised 4.2% a year earlier. Stronger than projected stock drawdown was the key driver of the deviation from the consensus. The contribution of net exports and investments to GDP growth was negative. [...]

April 6, 2015 Oguz Erkol Macro View 0

March CPI Above Expectations

March CPI Above Expectations

Monthly inflation came in at 1.19% notably higher than the market consensus of 0.8%, made a bad surprise thanks to food and energy prices. Higher food prices are mostly due to the seasonal effects while the latter filtered into the surprise rise in headline inflation thanks to the pass-through effect arising out of weaker Turkish [...]

April 3, 2015 Oguz Erkol Macro View 0

Halkbank: Not A Good Play for the Current Trends

Halkbank: Not A Good Play for the Current Trends

Halkbank has performed poorly since last November and now the stock trades slightly below its book value and is one of the worst performing stocks among Turkish blue-chip stocks. The bank closed 2011 with 14.4% return on equity and an aggregate net income of 2,206 million liras, which was 22% lower compared to the posted number [...]

April 3, 2015 Oguz Erkol Company Reports, Equities 0

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, Quantitative Analysis 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, Sector Reports 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, Sector Reports 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