Initial public offerings have just about ground to a halt, with only three share sales this year worth $23 million, as economic growth stalled and in the wake of the lira’s crash to an all-time low at the end of 2018.
Sunday 04, August 2019
JPMorgan Chase & Co. expects Turkey’s capital markets to come back to life as inflation and interest rates decline, reigniting investor interest as the economy stabilises, reported Bloomberg.
Mustafa Bagriacik, JP Morgan & Co. Istanbul CEO, said, “IPO demand is accumulating in Turkey and when markets normalise, there should be initial public offerings, secondary public offerings, and accelerated book buildings.”
“Demand and risk appetite for Turkey will be there once predictability is there because investors are generally underweight Turkey,” Bagriacik said.
The currency has since rebounded and is the best-performing emerging-market currency this half, while new central bank governor Murat Uysal cut rates by a record last month, citing an improved inflation outlook.
Activity from banks is also expected to start improving from September as lenders increase their borrowing to bolster their capital levels, added Bagriacik.
The CEO also expects new issuance from the corporate sector, although he declined to identify specific deals.
Bagriack said that markets are waiting for clarity on the M&A side—to have predictability on macroeconomics, currency and growth, adding that he expects more investment from China in Turkey as part of their Belt and Road Initiative.