Some positive news coming out of Turkey.
On interest rates: The Central Bank of Turkey (CBT) cut just 50bps this time to 9.25%. This is in line with the consensus, but is getting very attractive for banks and domestic names. Expect rates to be down to 8.5% in June and bottoming around 8% (historically first!)
On the banking results: They are out, strong and even better than high expectations. The street has lagged and will upgrade soon.
Turkish banks are now up to 8.6/7.9x 09/10 PE, 1.25/1.1x PBV, with the upside to go. Garanti Bank (GARAN.IS) is your highest quality name. It posted a 44 percent net profit Thursday. The only negatives are at the loan loss provisions level, which were pretty much expected.
TUR is a Turkish ETF, which is heavily weighted to banks and is the cleanest play for U.S. investors. Otherwise, these banks typically only trade locally.
[Let us know if you are interested in trading local Turkish markets (only serious inquiries please, as we may be beta testing this feature.)]
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