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VTB Sees Turkey Assets Rerating in 2023, Advises Caution for Now

TURKEY
  • VTB Capital expects 2022 to be a transition year for Turkish assets ahead of a highly likely “re-rating in 2023”
  • Expects stable environment in 1H of 2022, followed by a period of higher uncertainty until Turkey’s general elections in mid-202* Turkey’s main issues seen stemming from wrong macroeconomic policy, rather than fundamental issues in the real or financial sector
  • Says 2022 to be a year where Turkish economy faces a serious test of its resilience, though expects the economy to avoid a major downturn
  • Says it’s early for fundamental long-only investors to re-position in Turkey, but recommends long banks/short TRY for hedge funds
  • Recommends holding onto FX fixed income positions until maturity and “cautious stance” for new issuances
  • Says wait until 2023 for re-opening positions for lira fixed-income investors
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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