Turkey’s Stock Market Bubble: It Will End Badly!

Turkey’s national stock exchange catapulted from the bottom to the top EM performers list in the brief span of a quarter, even though Turkey has no new economic story, frequently bans international investors from financial markets and has messy politics, as attested by 5-year CDS prices of 520 points.  Why?  Because forced by the Erdogan administration Central Bank lowered interest rates below the going rate of inflation, forcing savers out of TL deposits.  Registered investors at the BIST, mostly retailers soared by 33% YoY, as amateurs began seeking their fortunes in equities. As Walter  Bagehot commented as early as 19th Century when greengrocers and house maids flock to the Stoc Exchange…, you know the end is near. When will the BIST bubble bursts?

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.