The Turkish equity market might benefit sustainably from the decision of the Turkish Constitutional Supreme Court, i.e. not to ban the ruling party AKP. Even in the run-up to the verdict the Istanbul Stock Exchange recorded gains of more than 10%. Hence the period of political uncertainty about the fate of the country and its government seems to have come to an end. Manfred Zourek, fund manager of ESPA STOCK ISTANBUL, one of the first Turkish equity funds worldwide of the Austrian investment fund company ERSTE-SPARINVEST, expects a phase of political stability that might support the Turkish equity market, which had come under enormous pressure in the previous ten months.
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"This verdict has resulted in a situation that both the government supporters and the secular forces in Turkey can live with. The investors will now be more willing to invest in the corporate sector again", as Zourek puts it. He points out that the positive economic scenario of Turkey has not changed. The economy will grow by about 4% this year, and in the coming years growth rates will be even higher. Inflation will settle at around 10% and thus be in line with expectations. At a price-earnings-ratio of about 8x the Turkish stock exchange currently exhibits one of the most favourable valuations worldwide. Banks and financial service providers should be among the main beneficiaries of the positive sentiment on the market.
More information: Factsheet
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