MORE: JPMorgan Cuts Turkey External Debt to Marketweight

Local-currency debt kept at overweight with reduced exposure, JPMorgan Chase & Co. says in report on emerging markets outlook and strategy dated yday. *“With the improvement in the external balance ending soon and rating upgrades already part of the market consensus in our view, we see fewer catalysts for outperformance and move back to marketweight” in external debt, report says * JPMorgan moved Turkey external debt to overweight in November * Turkey 2012 GDP growth seen at 2.6%, rising to 3.7% in 2013, with slowdown in exports “likely to keep growth below its potential” * Central bank to focus on demand management as loan growth picks up * Reserve requirement increases “on the agenda” as loan growth strong * Current-account deficit will probably remain below 7% of GDP * Turkish companies selling intl bonds improves Turkey’s debt dynamics as it leads to longer maturities

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

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