According to the IIF (Institute of International Finance) Turkey’s asset valuations and interest rates have been voted some of the most attractive globally, and as a result more than $15bn was invested into Turkish assets since November of last year. A market that was promised to be more open and friendly, an overhaul of the management system by the President and promises of some of the biggest returns in the emerging markets seen in a long while contributed to the influx of money, and foreign investors, who, not so long ago, turned their backs on Turkey are now returning with great enthusiasm.
Optimistic about the future ahead fuelled by the coronavirus vaccines and a strong economic forecast despite the pandemic, has led to many foreign money managers & Turkish banks predicting that influxes like the ones seen recently could double by mid-year. Not only that, but since the hike in interest rates from 10.25% to 17% swift money tightening has increased Turkey’s real rate from a deep negative to 2.4%, leading the Central Bank to express their determination at bringing the inflation rate down to singular figures.
It’s a long road of course, but Polina Kurdyavko who is the head of Emerging markets at BlueBay Asset Management said that they were ‘very encouraged to see a different approach coming in, and they plan to keep it that way as long as they continue to see the orthodox steps.’
To further highlight how foreign investors have helped, not only have Turkish stocks increased by 33 percent, but also foreign bond ownership has also increased to 5%, up from 3.5% last year. Currency has also seen a wealth of investment too, with investors having purchased $235bn in hard currencies. The TL (Turkish lira) has also risen recently, recovering from an all time low of 8.57 against the dollar to 7.40.
