Ahead of Turkey’s second general election in five months, investors say the next government must focus attention on the economy, as the lira plunges and investors bail out of equity holdings. Ciara Lee reports.
Investors cautious over Turkey election
It was viewed as a safe bet in the Middle East – but scenes like this have forced investors to reduce their exposure to Turkey.
Anti-government demonstrators were defending a media group linked to the president’s main opposition ahead of a weekend election – the second in five months.
The Islamist-rooted AKP has dominated Turkish politics for 13 years.
But polls suggest it will again fail to secure enough votes to govern alone.
That could mean a weak coalition – and no more being a favoured emerging economy with a strong export market and banking sector.
The country’s prime minister is using that argument to try and convince voters.
(SOUNDBITE) (English) TURKISH PRIME MINISTER, AHMET DAVUTOGLU, SAYING:
“Turkey made a huge reform in social political economical life and created an economic miracle, a success story. “
Other economic challenges have also distracted Turkey’s policy makers.
The lira has plunged as investors bail out and equity holdings have fallen by over 6 and a half billion dollars since March 2014.
Matthew Beesley from Henderson Global Investors.
(SOUNDBITE) (English) MATTHEW BEESLEY, PORTFOLIO MANAGER, HEAD OF GLOBAL EQUITIES HENDERSON GLOBAL INVESTORS, SAYING:
“Turkey remains an economy, and as an investor, a geography, with many challenges abound. One off-set is that after a difficult period of performance for Turkish equities, it is an equity market that looks quite attractively valued. The question in investors minds is whether that attractive valuation offsets the considerable uncertainties ahead of Turkey.”
The country has other pressing issues too.
It’s the frontline in the battle with Islamic State in neighbouring Syria.
And it’s under pressure from Europe to stem the biggest migration the continent has seen since World War Two.