Turkey

Tayyip Erdogan erodes Turkey’s market defences

10 July 2018

The president named his son-in-law as the finance minister in a new cabinet which excludes the man most trusted by investors. That’s a mistake. The self-styled “enemy of interest rates” now has no one to sugercoat policies and rhetoric that are apt to unsettle Turkish assets.

Hadas: Turkish strongman overcomes mixed economics

26 June 2018

Tayyip Erdogan’s nationalist and religious appeal gave him victory in the presidential election. Economic factors played a lesser role. The mix is typical for “will of the people” rulers. They make financial promises, but their supporters care more about identity than money.

Turkey’s strongman gains mandate for bad policies

25 June 2018

Tayyip Erdogan and his AK Party emerged victorious from presidential and parliamentary elections. Enhanced powers may encourage the Turkish leader to implement inflationary stimulus and again challenge the central bank’s independence. Investors will be less forgiving than voters.

Guest view: Beware emerging market storm clouds

22 June 2018

A new period of mounting risks and uncertainties looms on the horizon for developing economies like Turkey, Malaysia, Brazil and Mexico, argues former Citibank executive William Rhodes. Rising price volatility and pressures on a range of currencies are merely the warning signs.

Hadas: Market complacency curses debtor countries

31 May 2018

President Erdogan is wrong to claim a sinister “interest rate lobby” has aggravated Turkey’s structural weaknesses. Foolish foreigners have, however, financed unsustainable consumption binges in this and other economies. Remedies range from regulatory nudges to capital controls.

Turkey’s FX rot demands radical measures

23 May 2018

A massive one-off rate rise is the least it will take to halt the lira’s accelerating slide to new record lows against the dollar. Even then, investors might still fear President Tayyip Erdogan’s monetary policy meddling. Capital controls would then grow more likely.

Emirates NBD’s Turkish deal riskier than it looks

22 May 2018

The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.

Turkish politics will subvert currency defence

10 May 2018

President Tayyip Erdogan wants to support the lira, which has hit record lows against the dollar. That would require measures to curb inflation and the current account deficit. His efforts to pump-prime growth, especially before June elections, will achieve the exact opposite.

Emerging markets split into haves and have-nots

8 May 2018

A stronger dollar and higher U.S. bond yields have hit Argentina, Indonesia and Turkey especially hard. But others like the Philippines are in sounder economic shape. Buoyant oil prices create winners as well as losers. For investors, discrimination is the better part of valour.

Hadas: Even Trump can’t make graft great again

11 April 2018

Resistance to corruption is evident in cases against ex-leaders of South Korea, Brazil and South Africa. Old royal privileges make no sense in modern economies. U.S. officials and the corporate elite have strayed, but rising middle classes will keep straightening out the crooked.

Sberbank’s homeward pivot is a no-brainer

30 January 2018

The Russian bank is in talks to offload its majority stake in Denizbank. Sanctions had already taken the shine off Sberbank’s expansion abroad. But selling the Turkish lender at its $3.2 bln book value would bolster capital and help it become even more dominant in Russia.

TPG follows Turkish raki feat with Myanmar whisky

13 October 2017

The buyout firm has sold out of Myanmar’s largest spirits company in a $1 bln deal. As it did in Turkey, TPG again bought small, scaled up and sold to a big corporate buyer. Making deals in places like Yangon is an acquired taste – but can yield potent returns.

Qatar standoff spells end of Gulf cooperation

3 July 2017

Saudi Arabia has granted the sheikhdom two more days to comply with its demands. Failure to reach a deal could escalate the dispute, hitting regional economies and investors in equal measure. But even if both sides back down, plans for greater economic collaboration are on hold.

Turkish lira will stick with FX underdog role

24 January 2017

Rate-setters passed up the chance to give the battered currency even a brief respite. Investors’ doubts about the central bank’s independence show how political concerns are breeding economic ones. Steep market losses can entice bargain hunters, but not when worse may lie ahead.

Turkey-Russia pact can survive Ankara flashpoint

20 December 2016

Moscow’s ambassador in the Turkish capital has been shot dead by a policeman seeking revenge for Aleppo. In 2015, Recep Tayyip Erdogan and Vladimir Putin were at loggerheads. Now mutual self-interest over Syria and a perceived common enemy mean the shock can be smoothed over.

Turkey will pay high price for political stability

18 July 2016

President Tayyip Erdogan is reasserting control after seeing off a military coup. He offers stability of sorts, which explains why Turkish assets pared knee-jerk losses. But his crackdown also engenders uncertainty, which investors loathe. Luring foreign money will be harder.

Turkey’s failed coup leaves no victors

16 July 2016

President Tayyip Erdogan’s government survived an attempted military coup but has few reasons for triumphalism. Much-needed foreign capital is likely to flee, and all the faster if there are harsh reprisals. Economic damage risks making this key U.S. and EU ally less reliable.

Thomas Cook is shock absorber for tourist turmoil

19 May 2016

Despite increased like-for-like revenue, the UK holiday group’s shares dropped by almost a fifth as it reported half-year results. A missing Egypt-bound airplane underlines how difficult the tourism business has become. 

Dixon: Turkey deal offers a lot – if it sticks

8 March 2016

An offer to reduce disorderly migration would cut the risk of Britain leaving the EU and Greece quitting the euro. It would also shore up German Chancellor Merkel’s position, helping stabilise the EU and the Schengen Area. What it won’t do is stop anti-migrant populism in Europe.

Qatar price for Turkish bank reflects weaknesses

22 December 2015

The Gulf state’s largest lender says it will pay National Bank of Greece 2.75 bln euros for Turkey’s Finansbank. A price equivalent to around one times book value looks cheap. But business conditions have worsened. Qatar National Bank may find it hard to generate economic profit.