Turkey

Equity and bond investors hoping for the Turkish central bank to step in and cool its overheating economy will be dismayed by President Erdogan’s pledge to influence its decisions. But they should not be surprised.

Loans bankers are keeping their cool over Turkey’s sharply deteriorating lending conditions, though borrowers in the country with a majority lira revenue and hard currency exposure have been warned that tough times are head.

Turkish discount grocer Şok Marketler got its IPO over the finish line at the top of its revised price range.

The global pressure on emerging markets, triggered by a multitude of factors but most obviously a rapidly strengthening dollar, has been felt across the asset class. The most notable casualty in equities has been Turkey, which at the beginning of 2018 was expected to produce a bumper crop of IPOs this year.

The last two weeks have been the toughest in recent memory for emerging market bond investors who have seen their assets in local currencies and dollars alike take a hammering amid the collapse in the Argentine peso and Turkish lira.

JP Morgan's launch of an environmentally and socially conscious version of its EMBI index is well timed, as fund managers realise that dodgy morals can lead to shabby financial statements.

Lenders to Vakifbank’s Turkish Islamic finance subsidiary got a 90bp reward for financing the smaller specialist financial institution over its parent company, according to bankers close to the transaction.

US President Donald Trump’s decision to reimpose sanctions on Iran has sent Turkey’s bonds, already under pressure from a weakening currency, flying wider.

The strengthening dollar is wreaking havoc for emerging market bond investors as assets in local currencies and dollars alike take a hammering.

The IPOs of two Turkish retailers, Beymen and DeFacto, were cancelled at the end of last week, after failing to attract enough demand to cover the shares on offer. A third IPO, Şok Marketler, was extended to Wednesday May 9. All three were seeking to list in Istanbul.

Shares in Vivo Energy, the African fuel distributor, rose more than 3% on its first day of trading on the London Stock Exchange on Friday, after its £558m IPO attracted substantial demand.

Turkey’s Garanti Bank has wrapped up its springtime loan refinancing, raising $1.4bn-equivalent and continuing the pricing trend seen among peers in recent weeks.