Page 22 - bne IntelliNews Turkey Outlook 2024

Before the expected inflows following the local elections, some more devaluation is on the way.
Then, after the portfolio inflows begin, Turkey will be getting ready to fall into another “hot money” trap. The value of the lira will boom, the current account deficit will leap and domestic production will collapse.
And the country will become ready for the next portfolio outflow shock.
The beginning of portfolio inflows is pinned for April. Then this will be followed up by the finance industry deciding that there is no more space for lira appreciation.
As things stand, the USD/TRY rate is still heading north. On September 21, the pair once again broke through the horizontal barrier set at the 27.00-level. The latest record high, registered on January 4, is 29.9750.
Since December 15, the Turkish government has returned to its ‘five/10 kurus (Turkish cents, pronounced as kurush) devaluation per day policy’. As of January 5, the daily tranche was dug at around the 29.85-level. The annual rise in the USD/TRY pair, controlled by the regime, remains at 59%.
Following the local elections in March, Turkey’s policy rate will be at its peak. Then the course of the USD/TRY pair will be observed.
When the northward pull on the pair ends, the moment will be seen as signalling the beginning of portfolio inflows and the opening of the window for slowly building up lira papers.
8.2 Stocks
Borsa Istanbul remains a mess. Widespread manipulative operations regularly take place. The trading boards are not deep enough and algorithms trading via well-known foreign brokerage houses rule the market.
In any case, with the expected lira appreciation, Turkish equities will offer good returns in 2024. ETFs, such as the most popular one, iShares, could be a better choice rather than dealing with shares.
For more professional investors, limiting the scope with leading blue chips would help avoid problems related to stock operators.
In 2022, the Turkish government delayed the implementation of hyperinflationary accounting rules, in accordance with IAS 29
22 Turkey Outlook 2024 www.intellinews.com