A sell-off in the early part of this year means that the Turkish equity market has an average price/earnings multiple of 12, combined with a yield a shade below 3 per cent. Despite a troubled year, the market is now attracting increased foreign investment. Performance has been lacklustre through much of this year, but prospects for 2016 have been enhanced by the recent re-election of the sitting Justice and Development Party (AKP).
Political uncertainty is toxic for markets. Not only had equity values pulled back on the Borsa Istanbul (BIST), but the Turkish Lira lost around a third of its value against the greenback and the euro in the two or so months leading up to a re-run of June’s election, which had resulted in a stalemate. The subsequent victory of the AKP mightn’t have played well with ‘progressives’ inside and outside of Turkey, but it has helped to shore-up investor confidence.
The Borsa Istanbul is taking on an international dimension; recently we’ve seen the launch of BIST 30 Index futures and options trading on the UK exchange. And a memorandum of understanding has been inked between the Tehran Stock Exchange and Borsa Istanbul in order to facilitate the opening of foreign markets, thereby enabling Iranian firms operating in the copper, petrochemicals and automotive sectors to go public on the Istanbul exchange.
