Finnish investor forecasts stability in stocks
Güncelleme Tarihi:
by Reeta Paakkinen
Oluşturulma Tarihi: Nisan 07, 2009 00:00
HELSINKI - Ari Metso, chief executive officer of Helsinki-based Taaleritehdas East Asset Management, expects stock prices at the Istanbul Stock Exchange to rise after Turkey signs a new loan with the International Monetary Fund in the coming weeks.
"As the local elections have passed, we expect the Justice and Development Party [AKP] government to continue its policy of reforms and sign a new accord with the IMF that it has been planning for a long time. We expect the signing of the loan to increase stock prices, while uncertainty related to the financing situation will lessen," Metso told the Hürriyet Daily News & Economic Review last week in Helsinki.
The most important issues Turkey is still negotiating with the IMF are related to, among others, budgetary policy and structural reforms, for example an independent tax administration body. The IMF has publicly signaled that in the current financial circumstances it is willing to accept a more relaxed budgetary discipline as long as the government strengthens its grip on spending in the future.
Metso said the results of the recent local elections are a positive development for both Turkey's domestic politics as well as the country's process to join the European Union. "That the AKP could keep its voter base at approximately 40 percent means the party still has a strong support for its politics. On the other hand, that the party lost some of its voters compared to the 2004 local elections means we can expect the party to seek compromises with the opposition. This would be extremely beneficial for both Turkey's domestic development as well as the negotiations to join the EU," Metso said.
Taaleritehdas was established in September 2007 and today manages some 600 million euros. Lydian Lion, the firm's long-only equity fund investing in listed Turkish companies aims to provide sustainable, good returns by using an active stock picking style with a mid- and small-cap bias. Its portfolio is relatively concentrated in 30 to 35 key holdings Ğ the five largest at the moment being Garanti Bank, Turkcell, İşbank, Akbank and Tüpraş.
"Despite an increasing non-performing loan stock, Turkish banks offer excellent value due to their high adequacy ratios and the strong results expected for the first quarter of this year," Metso said.
Recently, the attractive pricing of Turkish equities has brought Lydian Lion new institutional investors, Metso said. "Among these is, for instance, one of the largest mutual pension insurance companies in Finland. There is general consensus that with their current low valuations Turkish equities offer good medium- to long-term return potential, especially for euro investors due to the Turkish Lira's recent weakness," he said. "At the moment the Turkish equity market is one of the cheapest globally. With consensus estimates that the price-to-earnings ratio for year 2009 now is about 6.4 and for year 2010 it is about 5.2," he said.
In 2009, Metso expects Turkey's gross national product to experience negative growth. "The long-term growth potential in Turkey is particularly positive because of the large domestic market, young population and dynamic business sector,"Metso said. "But during the first six months of this year the economy will shrink by some 7 to 10 percent because of halts in industry production and reduced demand for exports."
The most important issues Turkey is still negotiating with the IMF are related to, among others, budgetary policy and structural reforms, for example an independent tax administration body. The IMF has publicly signaled that in the current financial circumstances it is willing to accept a more relaxed budgetary discipline as long as the government strengthens its grip on spending in the future.
Metso said the results of the recent local elections are a positive development for both Turkey's domestic politics as well as the country's process to join the European Union. "That the AKP could keep its voter base at approximately 40 percent means the party still has a strong support for its politics. On the other hand, that the party lost some of its voters compared to the 2004 local elections means we can expect the party to seek compromises with the opposition. This would be extremely beneficial for both Turkey's domestic development as well as the negotiations to join the EU," Metso said.
Taaleritehdas was established in September 2007 and today manages some 600 million euros. Lydian Lion, the firm's long-only equity fund investing in listed Turkish companies aims to provide sustainable, good returns by using an active stock picking style with a mid- and small-cap bias. Its portfolio is relatively concentrated in 30 to 35 key holdings Ğ the five largest at the moment being Garanti Bank, Turkcell, İşbank, Akbank and Tüpraş.
"Despite an increasing non-performing loan stock, Turkish banks offer excellent value due to their high adequacy ratios and the strong results expected for the first quarter of this year," Metso said.
Recently, the attractive pricing of Turkish equities has brought Lydian Lion new institutional investors, Metso said. "Among these is, for instance, one of the largest mutual pension insurance companies in Finland. There is general consensus that with their current low valuations Turkish equities offer good medium- to long-term return potential, especially for euro investors due to the Turkish Lira's recent weakness," he said. "At the moment the Turkish equity market is one of the cheapest globally. With consensus estimates that the price-to-earnings ratio for year 2009 now is about 6.4 and for year 2010 it is about 5.2," he said.
In 2009, Metso expects Turkey's gross national product to experience negative growth. "The long-term growth potential in Turkey is particularly positive because of the large domestic market, young population and dynamic business sector,"Metso said. "But during the first six months of this year the economy will shrink by some 7 to 10 percent because of halts in industry production and reduced demand for exports."