BofA: Turkish banks back on radar

Bank of America stated in its report titled 'Turkish banks back on the radar' that investor interest in Turkish banks has increased after many years. Bank of America Analyst David Taranto drew attention to the recent increase in investor interest in his analysis of Turkish banks. The report stated that "The intensity of recent interactions is reminiscent of the pre-2013 period when single-digit interest rates and credit rating increase expectations were present. This time, low-level positioning, inflation, normalization outlook in interest rates and real returns of banks are among the reasons for the interest." It was stated that unlike previous years, funds making long-term investments dominated entries to the Stock Exchange this time and that "The common view is that banks will best keep up with Turkey's normalization theme. Questions regarding inflation expectations, exchange rate outlook and sustainability of orthodox policies are on the table in almost every meeting." The report stated that regulations have removed the stock exchange from being a playground for hedge funds and said, "Short selling ban and high offshore TL funding costs prevent hedge funds from making transactions." Regarding the expectations for increase and basic concerns, it was stated that "Bullish investors think that the credit rating is at the beginning of an increase, as it was in the early 2000s. On the other hand, valuations continue to be a problem for investors expecting a decrease." The analyst, who stated that banks have been trading focused on the next quarter for a long time, said, "The fundamental change for us in the current cycle is that questions have shifted to the medium-term outlook. We expect the fundamental story of banks to accelerate after the first quarter after interest rates peaked." The report stated that there was a rapid recovery in the CDS and bond markets and that stocks would follow, and gave a 'Buy' recommendation for Akbank, Garanti, İş Bankası and Yapı Kredi stocks.