Business | Markets
Rally in cheap Turkish stocks held back by political woes
After a collapse in Turkish shares, analysts predict the market could rally as much as 50 per cent, but short-term investors dare not move back until domestic politics look clearer and the global mood improves.
- Reuters
- Published: 00:14 June 22, 2008
Istanbul: After a collapse in Turkish shares, analysts predict the market could rally as much as 50 per cent, but short-term investors dare not move back until domestic politics look clearer and the global mood improves.
Turkish stocks, already sensitive to swings in global sentiment because of a huge current account deficit, have been knocked hard by the prospect of the ruling party being banned for Islamist activities.
The once fast-growing economy is slowing as consumer confidence slides and interest rates are moving higher, in a potential threat to earnings.
Istanbul's main stock index has lost 31 per cent this year. In dollar terms it lost 37 per cent to the end of last week, the worst performer in emerging markets, which lost 10 per cent overall, according to data from Morgan Stanley.
"It's cheap but it may stay cheap," said Ali Riza Incekara, head of equity research at Raymond James, saying the main index could fall further to 36,000 points from current levels.
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