What's Behind The Takeoff In Turkey's Market

It is nice to see the Istanbul Stock Exchange being reported among the leaders in its category, in "Turkey: No turkey" (In Business This Week, Apr. 24). But one should have certain reservations regarding the underlying reasons for this phenomenon. In fact, the move behind investment decisions of individuals is speculative rather than aiming to receive reasonably secure and stable returns in the medium and long term.

It should also be noted that short-term borrowing needs of the government and the interest rates offered for this purpose do have a significant effect on the investment decisions of individuals. Another factor is the expectation in foreign exchange markets, which have not been "hot" enough to convince investors to hoard U.S. dollars or German marks.

Finally, the forecast that corporate profits will grow by 25% in 1995 seems somewhat optimistic after a year of negative growth in gross national product in 1994.

Nevertheless, the Turkish economy is expected to perform better than last year in spite of the number of hurdles in front of it.

Sitki Erguney

Corlu, Turkey

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