Conexio consulting

THE 2018 EXPECTATIONS FOR ISTANBUL STOCK EXCHANGE

The Istanbul stock exchange BIST-100 index has risen by about 47 percent since the beginning of the year. In the strong uptrend, compared to similar countries, the effect of the stock market being discounted and the increasing profitability of the company was great. As is the case in the global stock market in 2017, Istanbul Stock Exchange has a very positive year in general terms. The index, which ended 2016 from the level of 78.000, has not only exceeded the psychological resistance of 100.000 points in 2017 but also carried its historical summit to the level of 115.000. The global economic recovery in 2017 and the expectation that this recovery will continue are likely to be the main determinants of global stock market uptrends such as the Fed’s expectation of a more pigeony attitude in a significant part of the year and weaker dollar against major global currencies. Thanks to the fact that BIST has been in a decentralized position for similar markets in recent years and the steps taken to support economics and finance markets and to its contribution to support economic activity, The Istanbul Stock Exchange Market performed quite strongly. The BIST 100 index closed the year at record levels. The BIST 100 index reached the highest closing of all time with 115.333 points, with an increase of 0.74 percent in the last trading day of the year. Transaction volume was TL 5.6 billion.

Is Yatırım Menkul Değerler AŞ Research Director, Serhat Gürleyen, said that Turkey’s 2017 often shaken by political and geopolitical shocks, while it has been able to move with the world market. Gürleyen, as mentioning the economic datas expressed in the US, comfort the developing markets and Turkey and said “The US is growing. Employment is increasing. Unemployment is falling. However, inflation does not increase in the US as there is no pressure from wages and retail prices. This environment is also the best environment possible for Turkey. Turkey is growing, but no pressure to increase interest rates resulting from the world or that pressure comes more slowly. “Commenting on the US Federal Reserve’s (Fed) decision to raise interest rates over 3 next year, and 1 each year in 2019 and 2020, Gurleyen said that the world markets did not price the Fed’s interest rates so much so the dollar depreciated in global markets.

Turkey is net importer of capitals from other parts of the World and a country who is self-funding by foreign financing, and needs to find money from outside to grow. And it should be noted that the devaluation of the dollar is positive for Turkey. With the mentioned developments and considering the growth of Europe, Gürleyen said they don’t have bad estimations for growth of Turkey in 2018. Gürleyen said that they do not foresee very sharp declines in inflation next year, and that inflation will be 10.5 percent this year and 8.9 percent next year.

The report, which includes Garanti Investment’s 2018 forecasts, said that the stock performance of BIST 100 is expected to be strong in 2018. In the report is mentioned that “Upward movement will mean new record levels for our stock market. We expect both banks and non-bank industry and service companies to announce positive financial results in 2018. We expect high platelets, which will be reached in 2017 after the rapid sales seen in bank and company profitability, to keep upward slope in 2018. This will reflect to the company performances. Wer ecommend that sectors such as banking, aviation, telecom, contracting, iron and steel and oil refining remain in the forefront but the company’s own dynamics should be taken into account in the stock selection. We expect the performance of the Turkish stock exchange to be stronger in 2018 than the similar stock exchanges. Because, in our case, our stock market valuation points to a very serious discount, such as 35-40 percent on a 12 month forward price / earnings multiplier basis. We anticipate that this discount will shrink in 2018. “

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