Erste Offers Structured Products in Gold, Oil in Turkey

Erste Group Bank AG is planning to offer structured products in the form of lira-denominated certificates to be listed on the Istanbul Stock Exchange, said Ingo Bleier, head of investment banking.

Vienna-based Erste will be the first to sell the products, labeled “turbo certificates,” in the Turkish market, provided the market regulator approves its application, Bleier said in an interview in Istanbul today. The value of the certificates will be based on changes in the value of the German stock index, oil and gold.

Erste is among European and U.S. banks that entered the Turkish market over the past decade to take advantage of economic growth that’s more than three times the average in the European Union. Prime Minister Recep Tayyip Erdogan is planning to turn Istanbul into a financial center to rival cities such as Dubai.

“We are bringing more variety to the Turkish market through these certificates,” he said. “These will add depth to the market and make it more interesting.”

Bleier said he expects 20 to 30 million euros of trading volume in the certificates in Turkey in the first six months after they are issued. He expects the volume to exceed 100 million euros within two years.

Turbo certificates allow investors to benefit from short-term market fluctuations. The certificates track the underlying asset and their value develops according to the asset’s price.

Bleier also said Erste is planning to focus on corporate finance in its growth strategy.

Erste remains bullish on the economy, expecting a sharp drop in growth this year though seeing it picking up again in 2013, he said.

Erste expects Turkey’s economy to expand 3.5 percent in 2012 and 4.5 percent in 2013, Bleier said. The economy may grow 3.3 percent in 2012 and by 4.6 percent next year, the Paris-based OECD said on May 22 in its annual economic outlook.

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