Turkey 2009 League tables

The downturn has not been comfortable for Turkey. Exports are collapsing. Unemployment is high, at around 15%, and rising. Youth unemployment, at around 25%, is particularly worrying, undermining one of the macro economic factors Turkey has going for it – its young population. It is in the process of negotiating an IMF loan, a stark reminder of its economic problems. And it has an illustrious history of economic problems morphing into political ones. Yet optimists can look at the situation through a different set of indicators, revealing a more...

Rightly or wrongly, there is a stigma attached to IMF assistance. Like asking for charity, it is seen by many as a sign of failure. Even at a time when so many economies are failing, admitting to the need for outside help can be seen as tantamount to economic incompetence. For a party that has been in power since before the onset of the crisis, that is a bad message to convey. This is an issue that has been recognised by world leaders, and is one of a number of items that those who wish to reform the IMF argue must be addressed – a process that...

Turkey is a highly skilled, successful and steady borrower that has never disappointed foreign investors. Ever since Turkey first issued foreign currency bonds on the international markets it has been hailed as a sophisticated issuer. Many argue it is comparable to any Western nation in its ability to swiftly gauge the markets and play them accordingly. “Turkey is a regular, capable and heavy issuer of Eurobonds and with that comes a lot of experience in debt management,” said Ed Parker, sovereign analyst for Turkey at Fitch Ratings in London...

Even in the good old days, Turkish corporate borrowers were not very active players on the international capital markets. There have been some public issues, of course, and a fair number of private placements, but they have been overshadowed by a prolific sovereign whose bond issues have always met with resounding success. Consequently, only a handful of Turkish issuers have availed of the Eurobond market in past years. The rest have generally opted to fund themselves domestically. And they have been quite successful at that, thanks in large...

Turkish banks are in bullish mood. There is no denying the grim reality in which they find themselves, and yet there is a feeling they could not be in better shape to deal with the challenges they face. With little or no exposure to CDOs or other complex or toxic instruments and high deposit levels, Turkish banks are well funded in lira terms. While the average capital adequacy ratio in the developed markets is around 6%–8%, regulatory requirements in Turkey demand its institutions maintain levels above 12%. The average level in Turkey is...

By recent standards, some semblance of stability has recently returned to the Turkish equity markets. After a period of considerable volatility, when prices fell from a high of nearly 55,000 at the start of 2008 to around 21,000 by November that year, values on the ISE100 index are remaining steady within a range between 23,000 and 26,000 with occasional outbursts. Even when the markets were at their most volatile, the fact that Turkey’s equity market remained open without interruption, in contrast to Russia, for example, illustrates a level of...

Before the global crisis hit Turkey in late 2008, the lira had been gradually strengthening. But in the six months from September 2008 to March 2009, the currency fell from 1.2 against the dollar to around 1.8 – a drop of 50%, and business as usual for one of the world’s more volatile currencies. “Turkey had the highest interest rates in the investable world,” said Paul Biszko, senior emerging markets strategist at RBC Capital Markets. “It was a huge beneficiary of the carry trade, but that only holds up when volatility is low, otherwise the...

Turkey’s securitisation market was developing at a heady pace up until the financial crisis kicked in. According to rating agency Standard & Poor’s, Turkish securitisation future flow issuance went from almost nothing in 2002 to over US$2bn in 2004, to almost US$6bn of annual issuance by the end of 2006. The talk then was of asset-backed securitisations referencing existing assets being next to hit the market, a development that would have put Turkey on a par with emerging market countries such as South Africa and Russia, in terms of the...

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