EM's: Turkey picking up on improved sentiment - BTMU

Analysts at Bank of Tokyo Mitsubishi noted that there has been a pick-up in net portfolio inflows into Turkey early this year as global risk sentiment towards emerging markets has improved supported in part by the Fed’s more cautious approach to tightening policy.

Key Quotes:

"Foreign investors purchased a net USD1.2 billion of lira-denominated government securities and a net USD1.3 billion of domestic equities in Q1."

The re-emergence of heightened political risks casts doubt on whether more lira-supportive capital inflows will be sustained going forward."

"Global risk sentiment towards emerging markets also appears to be deteriorating again in the near-term reflecting in part heightened concerns over global growth which leaves the lira more vulnerable to negative domestic developments."