Turkish Stocks Enter Bull Market Amid Global Stimulus Measures

Turkish stocks entered a bull market amid speculation valuations remain attractive while central bank efforts to support global growth boost demand for riskier assets.

The Borsa Istanbul 100 Index rose for a third day, extending its rally to 20 percent from an almost two-year low in January, after the Federal Reserve this week scaled back forecasts for higher interest rates. The move came after policy makers in Asia and the European Central Bank boosted stimulus measures since the start of the year to shore up their economies.

“Turkish stocks are cherishing investors’ higher risk appetite following more pro-growth decisions by ECB and the Fed,” Burak Cetinceker, a money manager at Istanbul-based Strateji Portfoy Yonetimi, said by phone on Friday. “Valuations were significantly depressed after last year’s drop, and now those seem to be luring further interest.”

While Turkish equities advanced for a fifth week in the longest run since April 2014, stocks traded at a 23 percent discount to emerging-market peers and valuations trail their five-year average. That’s helped underpin the rally that’s seen overseas investors buy a net $548 million the country’s stocks this month through March 11, central bank show. 

The Borsa 100 rose 1.9 percent to 82,943.44 on Friday, extending this week’s gain to 4.5 percent. The gauge trades at 9.1 times projected earnings of its members in the next 12 months. That’s below the five-year average of 9.6 times and compares with 11.8 percent for the MSCI Emerging Markets Index, which was also poised to enter a bull market on Friday.

Turkish equities rebounded after losing $80 billion in value between May and January as violent clashes escalated along its border with Syria and the country struggled through two national elections to choose a government.

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