Market Professionals: Return to TL instruments is accelerating

According to the results of the Market Professionals Survey (PPA) organized by Spinn Consulting and attended by 118 market professionals in November, market professionals showed a preference for deposits and long-term TL bonds, while there was indecision regarding stocks.

In the previous survey, geopolitical risks, uncertainty about how the Central Bank of Turkey (TCMB) would continue interest rate hikes, and the neutrality resulting from the failure of deposit interest rates to increase as desired seem to have given way to more diversification in asset classes as of November. The recommendation to increase the weight on TL deposits increased from 60.2% to 63.6%, while the neutral recommendation decreased by 13.1 points to 16.9%.

Another asset class where the recommendation to increase weight was for long-term bonds. With the increase in bond yields, while 37.2% of market professionals gave a neutral recommendation in October, 41.5% recommended increasing the weight, and 9.3% recommended a significant increase in November.

Regarding domestic stocks, after turning from an increase in weight to neutral in October, in November, we see that 33.0% recommended neutral, and 33.0% recommended an increase in weight. On the other hand, the percentage of those recommending reducing the weight increased from 21.2% to 23.7%.

Most of the participating market professionals give a recommendation to increase the weight in gold, but the percentage of those recommending an increase has decreased from 49.6% to 43.2%. Since the beginning of our survey in January 2023, except for June, the recommendation to increase the weight on gold has been prominent.

Regarding foreign stocks, the majority (41.5% of participants) recommends increasing the weight. In the previous 3 months, participants recommended staying neutral.

In November, while there was no prominent recommendation to reduce the weight in any asset class, recommendations to stay neutral in USDTRY, foreign exchange deposits, short-term domestic debt securities, and eurobonds stood out as the highest-weighted recommendations.

According to the responses to the portfolio distribution question of the Market Professionals Survey, the majority of the market, like last month, places domestic stocks at the top of portfolio preferences this month, with a share in portfolios decreasing from 28.6% to 25.8%. Deposits, which had an average share of 20.9% in portfolios in October, received a 25.1% share in November. In November, the shares of domestic stocks, USDTRY, gold, and eurobonds in portfolios decreased compared to the previous month, while the shares of TL deposits, foreign stocks, short and long-term debt securities increased.