All markets have concentrated on the Russia-Ukraine tension in the recent period. Assertions that Russia occupies Ukraine have disquieted markets from stock exchange to foreign exchange (FX), from commodities to cryptocurrencies. The risk appetite which fell with the concerns over hot conflict has slightly started to increase after Russia said it would withdraw some troops from the Ukrainian border. At the same time, the U.S.’ statement that it hadn’t verified the withdrawal yet, has confirmed that concerns still have continued.
Although international developments instantly affect prices in Turkey, the Turkish market stands on its own feet with the impact of the declining share of foreign investors in the country’s money and capital market, according to daily DUNYA columnist Ufuk Korcan. The share of foreigners fell below 40% on the Borsa Istanbul stock exchange. Contrary to this, the rate of return in alternative investment instruments that decreases especially against inflation puts forward equities for domestic investors. As Korcan says, account owners, which aren’t satisfied with the negative real rate of return in fixed yield instruments such as deposit accounts and bonds may head towards investment instruments such as equities and real estate. On the other hand, Murat Barisik, Research Director of Ata Yatirim, who emphasizes that equities show a good performance in the inflationist environment says the weight of equities may be high in baskets.
The positive atmosphere is expected to continue until the beginning of March on Borsa Istanbul if the Russia-Ukraine dispute doesn’t transform into a hot conflict. Borsa Istanbul’s BIST 100 Index may reach 3,000 points within 12 months with the declining impact of the pandemic.
President Recep Tayyip Erdogan paid an official visit to the Democratic Republic of Congo yesterday as part of his four-day Africa tour. Erdogan, who convened with this Congolese counterpart Felix Tshisekedi, presided over the inter-delegation meetings in Congo. Turkey and Congo signed seven cooperation agreements in various fields, such as military, defense, and infrastructure. After the Democratic Republic of Congo, Erdogan is scheduled to visit the West African countries of Senegal and Guinea-Bissau. President Erdogan’s Africa tour is expected to focus on all aspects of bilateral relations and opportunities for improving cooperation between Turkey and these countries in all fields. During his visit to the Senegalese capital Dakar, Erdogan will attend the opening ceremony of the Dakar Olympic Stadium built by a Turkish company. He will also inaugurate Turkey’s new embassy building. Erdogan’s visit to Guinea-Bissau will mark the first presidential visit from Turkey to the West African country.
Regarding the data of the week, February confidence indices for four main sectors will be announced by the Central Bank and the Turkish Statistical Institute (TurkStat) on Tuesday morning. We will probably see individual increases and decreases, not a collective movement. However, there are signs that confidence may be on a downward trend in the industry and services sectors in the next few months.
On the other hand, this week, no domestic or global data will be released that will cause the markets to change direction. For this reason, we may experience a wait-and-see week, which will be shaped by the Russia-Ukraine tension and the Fed’s interest rate movements. FX rates have been moving in a very narrow band for about five weeks. So, seemingly, a downward or upward breakout is likely coming soon.
DAILY AGENDA
The Agricultural Input Price Index (Agriculture-IPI) rose by 45.61% in December 2021, compared to the same month of the previous year, according to TurkStat. Agriculture-IPI increased by 9.82% on a monthly basis.
The non-domestic producer price index (ND-PPI) jumped 96.44% in January, compared to the same month last year, according to TurkStat. The ND-PPI surged by 3.25% in January month-over-month.
The Financial Services Confidence Index rose by 1.7 points to 173.4 in February, as compared to January, according to the Central Bank.
The Ministry of Culture and Tourism will announce foreign visitor figures for January (11.00 am).
IN OUR MAGAZINE THIS WEEK
>> On the cover: The online food delivery platform Fuudy’s Co-Founder and CEO Ilker Baydar is on our cover this week. Fuudy wants to develop new products and services demanded by its customers who want the very best when it comes to good food. Therefore, the latest investment it received from Vakko, Turkey’s first luxury fashion brand, will go towards gaining knowledge in customer experience, deepening services, and creating operational synergy, according to Ilker Baydar. As he says, the investment will be a catalyst for the products and services we will be able to develop for Fuudy’s customers that demand high-end food. You can read the details on pages 8-9.
>> Professor Ilter Turan: Saying “I was wrong” without actually saying it. P. 10.
>> Business by Law: Use cases of blockchain technology and smart contracts. P. 11.
>> Chief Economist Gunduz Findikcioglu: Can the opposition win? You can read the details on pages 12-13.
>> Dr. Sibel Zengin: The West in a quandary amid conflict on Ukraine. P. 14.
