Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Russian consumer confidence index drops q/q, y/y in 4Q20
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
More...
Morgan Stanley Capital International (MSCI) is considering launching a consultation on a proposal to reclassify the MSCI Turkey Index to the Frontier Markets or Standalone Markets status if the accessibility level of the Turkish equity market further deteriorates, the company said on June 23.
As highlighted in the MSCI 2020 Market Accessibility Review released on June 17, the accessibility level of Turkey’s equity market has been adversely impacted by the introduction of short-selling and stock lending bans in October 2019 and February 2020, respectively, MSCI noted.
These bans severely restrict the ability of institutional investors to express views in active investment and hedge portfolio risk, it added.
“While volatility increased dramatically due to the COVID19 pandemic, global equity markets remained accessible and continued to function well, allowing issuers to raise capital and investors to manage risk during the crisis,” Dimitris Melas of the MSCI said.
“In the last 12 months, two important Emerging Markets, Argentina and Turkey, suffered substantial deterioration in market accessibility that could lead to their exclusion from the MSCI Emerging Markets Index,” he observed.
MSCI also pointed out that it reclassified Iceland as a Frontier Market from Standalone Market after capital controls, including a special reserve ratio, were removed on March 6, 2019.
Turkey’s weight in the MSCI Emerging Markets Index is below 1% and in the MSCI ACWI, excluding the US, and the MSCI ACWI global indices it is close to zero.
On June 23, S&P Global Ratings said that it had classified Turkey’s banking sector in its assessment framework in the same group as the banking sectors of Azerbaijan, Egypt, Kazakhstan, Greece, Bangladesh and Argentina. It took a swipe at the checks and balances within the Turkish institutional system, describing them as weak. Questions remained about the quality of regulation and the perceived independence of the watchdog and the central bank, it said.
Fitch Ratings rates Turkey at BB-/Stable, three notches below investment grade. Moody’s Rating Services rates Turkey at B1/Negative, four notches below investment grade, while Standard & Poor’s has Turkey at B+/Stable, also four notches below investment grade.
Fitch’s second rating review release for Turkey is expected on August 21. Moody’s second review is scheduled for December 4, while S&P is set to release its last scheduled review for this year on July 24.
Moody’s Investor Services previously scheduled a Turkey sovereign rating review for June 5 but that date has been put back. In its latest rating action on Turkey, in June last year, Moody’s issued a downgrade to B1, four notches below investment grade, with a negative outlook.
On June 15, Moody’s Investors Service said that it had downgraded Turkey’s flag carrier, Turkish Airlines, to B3, six notches below investment grade, from B2.
Turkey, with its B+/Stable rating by S&P, sits alongside Benin, Bolivia, Jordan, Kenya, Rwanda, Senegal and Bahrain.
Bolivia and Tanzania have B1/Negative ratings from Moody’s too while Fitch sees Bahrain, Bangladesh, Guatemala and Uzbekistan at BB-/Stable.
On June 18, ING Bank said in a research note that it saw a possible turning point in foreign investors’ interest in Turkish domestic government bonds occurring by mid-July when the recent deal between Brussels-based Euroclear Bank and the Turkish Finance Ministry comes into effect.
As of June 24, the last transaction in Turkey’s 2-year benchmark papers had occurred on June 22.
According to Mercan and Pham, the Euroclear deal “should be a signal of the government’s interest to attract portfolio flows and commitment to free movements of capital.”
This, it must be said, does not reflect the Turkey of today, given the market machinations of the Erdogan regime. It has no grounding in reality.
We are doing journalism in the post-truth age. Politicians pursue their manipulations and no one is surprised, for they are politicians, but those of us supposedly not buying into the Orwellian deceit need to hold on to verifiable facts for dear life.
On June 19, Moody’s said that it had decided to withdraw the ratings of ING Bank Turkey for its own business reasons.
“Business Reasons — Under certain circumstances, Moody's will withdraw a rating for an issuer or an obligation for reasons unrelated to the adequacy of information, or bankruptcy or reorganization status of the credit. When this occurs, Moody's will balance the market need for a rating against the resources required to maintain and monitor a rating,” according to Moody’s guidelines.
In March, Bloomberg quoted some unnamed sources as saying that ING Groep NV, the biggest Dutch lender, was considering a sale of its Turkish business.
ING has not officially denied the report.
According to ING’s macroeconomic research notes, the Turkish economy is doing pretty well and a huge inflow of portfolio investments is on the way.
ING does not release research on banking regulations in Turkey.
Register here to continue reading this article and 5 more for free or purchase 12 months full website access including the bne Magazine for just $250/year.
Register to read the bne monthly magazine for free:
Already registered
Password could contain only a-z0-9\+*?[^]$(){}=!<>|:-_ characters and have 8-20 symbols length.
Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.
Forgotten password?
Email field can't be empty.
No user with this email address.
Access recovery request has expired, or you are using the wrong recovery token. Please, try again.
Access recover request has expired. Please, try again.
To continue viewing our content you need to complete the registration process.
Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.
If you have any questions please contact us at sales@intellinews.com
Sorry, but you have used all your free articles fro this month for bne IntelliNews. Subscribe to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free subscription to bne's digital weekly newspaper to subscribers to the online package.
Click here for more subscription options, including to the print version of our flagship monthly magazine:
More subscription options
Take a trial to our premium daily news service aimed at professional investors that covers the 30 countries of emerging Europe:
Get IntelliNews PRO
For any other enquiries about our products or corporate discounts please contact us at sales@intellinews.com
If you no longer wish to receive our emails, unsubscribe here.
Magazine annual electronic subscription
Magazine annual print subscription
Website & Archive annual subscription
Combined package: web access & magazine print annual subscription