Turkey Bank Stocks Sink to Record Discount Amid Foreign Exit
- Valuations on lenders are 61% below industrial companies
- Policy changes, rate hikes seen potentially boosting sector
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Turkish bank stocks, hardest hit by a selloff of Istanbul equities from foreigners, are trading at a record discount to local industrial sectors. Only a combination of interest-rate rises and changes to government policy could shake them out of their slump, market participants said.
An index of major local banks has slid 32% this year, while the Borsa Istanbul Industrials Index has gained 17%. The lenders are trading at a 61% discount, based on estimated 12-month earnings, the widest gap since at least 2006.