Iran Crisis Hands Turkey Stocks an Opening to Win Back Investors - Bloomberg:
Turkish stocks turned out to be this week’s surprise winners from the Middle East crisis. And there several reasons why Istanbul equities may make the most of their moment in the spotlight to hold on to foreign investors’ attention.
The Borsa Istanbul 100 Index surged 4.5% Thursday, its biggest jump since November 2015 and outperforming more than 90 other global equity benchmarks tracked by Bloomberg, reflecting relief as concerns over an escalation in tensions between the U.S. and Iran dissipated.
Investors may be taking a closer look at some other attractive factors too. A drop off in foreign interest has left the market with a high valuation discount relative to emerging market peers. In addition, Turkey’s status as an oil importer means a post-crisis drop in oil prices may become a positive catalyst. On top of that, some of the country’s largest non-state-owned banks have just announced upbeat guidance for 2020, spurring optimism among money managers this week.
The historically low levels of international ownership compounded Thursday’s rally, spurring sharp gains in the private banking sector, said Julian Rimmer, a trader at Investec Bank Plc in London. The Istanbul benchmark index trades at 6.5 times estimated earnings, compared with a multiple of 13.1 times for the MSCI Emerging Markets Index.
Turkish stocks turned out to be this week’s surprise winners from the Middle East crisis. And there several reasons why Istanbul equities may make the most of their moment in the spotlight to hold on to foreign investors’ attention.
The Borsa Istanbul 100 Index surged 4.5% Thursday, its biggest jump since November 2015 and outperforming more than 90 other global equity benchmarks tracked by Bloomberg, reflecting relief as concerns over an escalation in tensions between the U.S. and Iran dissipated.
Investors may be taking a closer look at some other attractive factors too. A drop off in foreign interest has left the market with a high valuation discount relative to emerging market peers. In addition, Turkey’s status as an oil importer means a post-crisis drop in oil prices may become a positive catalyst. On top of that, some of the country’s largest non-state-owned banks have just announced upbeat guidance for 2020, spurring optimism among money managers this week.
The historically low levels of international ownership compounded Thursday’s rally, spurring sharp gains in the private banking sector, said Julian Rimmer, a trader at Investec Bank Plc in London. The Istanbul benchmark index trades at 6.5 times estimated earnings, compared with a multiple of 13.1 times for the MSCI Emerging Markets Index.
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