BY ALAATTIN AKTAS
Let’s say you are an investor. There is a country that offers you all kinds of opportunities, where the most authoritative voices say, “We can overcome any legislative obstacle, you just come.” The market is large, export opportunities are rich, but you have a question in your mind: What will you do if those who promise to overcome any obstacle create barriers against you one day?
Or, perhaps, a full-fledged state of law invites you to invest. There is no official promising you to overcome any legislative obstacle, because there is law there, and whatever the law says is done.
Which country would you choose?
No new investments are coming to Turkey. Aside from foreign direct investment, even portfolio investment to buy stocks and government domestic debt securities are not coming. Why do you think it is so? Is it because the country can’t give confidence to foreigners? Maybe discourses like “We can overcome any legislative obstacle” that we use to persuade these foreigners have had a reverse effect on them. The Ekrem Imamoglu decision should be read and evaluated from this perspective. If an act that does not constitute a crime is punished in order to achieve some political end, if the elected mayor of a city larger than many European countries is threatened to be removed from office in this way, no one will come to invest in such a country. They are not coming.
The decline in foreign exchange deposit accounts continues. The parity-adjusted decline in this item in the last five weeks amounted to USD 17.2bn, according to Central Bank data.
If there is a regression in foreign exchange accounts, well, where is this money going? Companies may be withdrawing foreign currency for year-end transactions or payments. So, what does a person on the street (the regular citizen) do with the foreign currency they withdraw from the bank?
Obviously, people are not opting for foreign exchange protected deposit accounts (KKM). There is no reason to go for this option. In the meantime, let’s point out that the foreign exchange protected deposit accounts showed a small increase of TRY 1.1bn between December 2-9. But the general trend here is clear and downward. This one-week increase is obviously due to account renewal and the addition of the return to the principal.
If not KKMs, where does the money that comes out of the foreign currency accounts go? There may be a tendency towards TL deposits with the thought that the foreign exchange rate will not increase. Some may be buying gold. Some of it may be going to the stock market. Or this money is going under the mattress.
There was a beyond normal increase in the stock market if the fluctuation due to the decision on the Istanbul Metropolitan Municipality Mayor Ekrem Imamoglu’s conviction for two days is not taken into account. It is clear that this is due to the increasing number of new investors.
Now, those who made this decision and shocked the everyday people who had just entered the stock market, have created chaos in politics. If you don’t leave space for savers and encourage citizens towards the stock market, the small investor will be surprised at what happens in the end! And they won’t believe the myth that something like the Ekrem Imamoglu decision was “just a court case.”