Newsletters
Investment giant JP Morgan downgraded the weight of the Turkish stock market from an "overweight" level to "neutral."
In the report published by JP Morgan, it was stated that high consumer price index (CPI), weak Turkish lira, and delayed interest rate cuts made the overweight recommendation currently valid for MSCI Türkiye premature.
Accordingly, JP Morgan stated that it reduced the weight of the Turkish stock market to a neutral level.
JP Morgan stated that its inflation forecasts for Türkiye have increased, while the report included the following statements: "Low foreign ownership and low valuations point to strong upside potential for the stock market in the medium term, but the most important near-term risk for the stock market is probably faster depreciation of the Turkish lira due to the impact of local dollarization."
JP Morgan listed the following among other risks: "US tariffs on China threaten Chinese exports to Europe and MENA, and emerging fundamentals may be ignored by emerging market investors who avoid highly uncertain earnings (inflation accounting) and low weight in emerging markets (50 basis points)."
"For emerging market investors to embrace Türkiye's long-term investment scenario, we need to see 'two tens' in Türkiye; both CPI and policy rates falling below 10%. We reflect this change by reducing BIM Magazacilik in the CEEMEA Strategy Top 10 (JP Morgan had added BIM to the top ten list at the end of January). To replace BIM, we add OTP, which has more Emerging Europe exposure. We also removed Nedbank and Discovery from the Top Ten and added Capitec and Naspers."
2 min read
