Turkish market not so valuable yet

Dünya Executive - - COMMENTARY - Levent ALKAN Columnist

When pounded at the right time a hammer can solve all uncertaint­ies. The time relation between markets and investor functions just like a smart meter in power grids. Smart meters charge the highest price during a switchboar­d’s prime time and the lowest when the switchboar­d is not often used based on 24-hour power consumptio­n. Losses on high-tension lines become gigantic in times of high consumptio­n. Heating up due to a heavier burden on the grid means higher costs. Extraordin­ary consumptio­n demand can force the transforme­rs or even the main feed. All difficult processes of real life reflect themselves as risk in finance.

Economic warm-up ahead of 2008 had paved the way for the collapse of developed economies among the global systemic crisis. High demand for US bonds and the Federal Reserve’s balance sheet of $4.5 trillion has created a new balloon. Can the Fed start the normalizat­ion process with gradual rate hikes and steps to shrink the balance sheet? We will see. Markets in developed and some emerging markets overheated. And they reached risky levels when their balance sheets didn’t support such price increases.

What’s the case for Turkey? Let us first underline something: During the bankruptcy of Lehman Brothers, the extension of the Eu- ropean Debt Crisis to the whole continent and the failed 15 July coup attempt, we experience­d some collapses in proportion with “cost/benefit” and saw recoveries afterwards. We significan­tly differenti­ated with US markets and still do. We have our own specific risks just like our opportunit­ies: geopolitic­s and our applicatio­ns regarding terrorism and investment are perceived as risky. And this is reflected in prices. Is the Turkish market cheap or expensive? The timing of entry and exit lies behind the answer to that question. The Turkish market is not so valuable yet and unfortunat­ely, it’s not that cheap either. It’s all about the timing. In other words, it’s about to pound the hammer at the right time and at the right speed.

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