To view the digial version of this report, please <a href="http://edition.pagesuite-professional.co.uk/Launch.aspx?EID=3b0c1ac3-f95f-4158-b236-ed11c9a15400" onclick="window.open(this.href);return false;" onkeypress="window.open(this.href);return false;">click here</a>. To purchase printed copies or a PDF of this report, please email gloria.balbastro@thomsonreuters.com As Turkey gets to grips with hefty economic policy challenges – and shrugs off the comp

To view the digial version of this report, please click here. Three Turkish banks are poised to follow in Sekerbank’s footsteps by issuing SME-backed covered bonds, seeking to diversify their funding and lure international investors to the country. According to Wasif Kazi, structured finance director at UniCredit, the country’s banks are all at different points in their preparation for issuance but are making steady progress. “Certain banks have already begun the transaction process and others a

To view the digial version of this report, please click here. At the end of 2011 there were just 366 companies listed on the Istanbul Stock Exchange, according to figures published by Turkey’s Capital Markets Board. Total market capitalisation, meanwhile, fell from just over US$300bn in December 2010 to US$225.7bn by the end of the year. Those numbers are modest – and by all accounts frustrating – by emerging market standards. A comparison of Turkey’s stock market indicators with those of the BR

To view the digial version of this report, please click here. The Republic of Turkey is usually the first sovereign out of the blocks from Eastern Europe, the Middle East and Africa, so when it did not immediately tap the market at the start of January, it appeared to be a sovereign under pressure. The main area of concern for investors was the sheer amount of debt that Turkey needed to raise. Despite being an established and sophisticated borrower well-known among the international investor com

To view the digial version of this report, please click here. Many European banks are under increasing pressure from their governments to focus their attentions at home, but a number of Turkish banks are looking to take the domestic success they have enjoyed domestically and apply it in new markets. Take Isbank. Halfway through 2011, Isbank had the second-largest banking network in Turkey, with 1,153 domestic branches, plus 15 foreign branches, two representative offices and a bank subsidiary in

To view the digial version of this report, please click here. Others remain to be convinced – especially among local bankers, who are feeling the pain. There are signs of progress but until it is rebalanced further the Turkish economy remains particularly vulnerable to external shocks. The new framework adopted by the central bank (TCMB) at the end of 2010 was intended both to tackle inflation and achieve financial stability by using a range of instruments. Currency market interventions and chan

To view the digial version of this report, please click here. At first sight Turkey could be sitting at the eye of a storm, having to deal solely with the enviable problem of an economy prone to growing too fast as turbulence swirls all around. That is certainly how Turkish business figures and outside observers see it, dismissing the crisis in neighbouring Greece, nausea in the eurozone, the prospect of a bust-up with the EU over Cyprus, and growing regional tensions stoked by Syria, Iraq and I

To view the digial version of this report, please click here. Turkish investors have long sought protection from the vagaries of FX and inflation via the derivatives market, swapping local capital into US dollars. With strong historical trade ties to Europe, Turkey is no stranger to the risk posed by currency moves, and has long been comfortable with currency swaps. “In such an environment, the FX market becomes a dominant front in the financial system,” said Fatih Keresteci, local head of treas

To view the digial version of this report, please click here. Although signed deal volume for 2012 only stands at just under US$1.8bn – versus US$5.8bn during the same period in 2011 – Turkey’s loan activity will pick up, said international lenders. Comparatively, loan volumes across the wider Central and Eastern European region – notably Russia – have been extremely slow this year, so the G20 member’s multi-billion worth of pending deal flow is taking centre stage. “Turkey’s economy is doing we

To view the digial version of this report, please click here. Turkey has been a popular destination for foreign banks seeking growth but the sovereign crisis of 2011 and the need for banks to cut risk-weighted assets have triggered a retrenchment by some players. “Banks are deleveraging and looking at their capital allocations but they have to balance the challenges they face in the short-term with the long-term potential of the Turkish banking market,” said one M&A banker focused on Turkey.

To view the digial version of this report, please click here. The founder of modern Turkey may have famously wished all religions “at the bottom of the sea” but, almost 74 years after Ataturk’s death, the republic’s deputy prime minister Ali Babacan announced that the government would issue Islamic sovereign bonds, which market participants say is one of several measures necessary to develop the nascent Turkish sukuk market. Low issuance volumes to date cast a spotlight on existing obstacles blo

To view the digial version of this report, please click here. Despite an economic growth rate that most EU members would envy, Turkey finds itself at a crossroads. In 2010 its GDP grew by 9% with 2011 estimates from the World Bank at 6.1%. Compared with forecasts of as little as 1.9% for the eurozone in 2011, it’s not hard to imagine why the Turkish government might be experiencing a sliver of schadenfreude. But beneath the growth lie some inconvenient truths. The unemployment rate is at a stubb