Video: Turkish stocks are rallying for all the wrong reasons

Turkey’s main stock index rallied 25% year to date in TL terms, leading all major Emerging Market equity benchmarks.
• The rally was scarcely attended by global fundas, which is a prerequisite for a sustainable increase.

• To the extent there is fundamental reason behind the rally, it might be retail investors pricing a “soft landing” scenario for the economy.

• This is incorrect. Interest rates are very likely to increase in the aftermath of 31 March local elections, while achieving success against inflation will require additional measures to slow down domestic demand.

• A sharp sell-off is likely in the coming weeks, unless global funds begin to trust Mehmet Simsek and begin taking large positions.

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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 and has contributed to the financial daily Referans and the liberal daily Radikal.