ISTANBUL—Here come the bulls: Turkey’s stock market hit record highs this week as investors bet that the central bank will further ease monetary policy to stimulate economic growth on the back of a quicker slowdown in inflation.
The benchmark Istanbul Stock Exchange 100 index climbed to an all-time high of 76,131.88 points on Wednesday, with its 48% surge this year outperforming an 11% increase by peers in the MSCI Emerging Market index.
The ISE-100 index has jumped 4% since Turkey snatched a much-coveted investment-grade status–the first since 1994–from Fitch Ratings on Nov. 5, further fueling international investor appetite for Turkish assets.
Fund managers in global markets are awash with cash and seeking high-yielding assets in a low interest-rate environment worldwide. In their quest, their eyes keep falling on Turkey. After lagging behind its emerging market peers in 2011, Turkey’s stock market more than caught up this year as investors bought into the government’s story of a stable currency and medium-term economic growth of about 5% as Europe grapples with a chronic debt crisis starting at Ankara’s neighbor Greece and stretching across the Mediterranean to Spain.
And now, Turkey has its ears bent to Western policy makers, whose actions may infuse its economy with fresh foreign cash.
“In addition to the strong volume and cash inflow in Istanbul Stock Exchange, global winds with the expectation of an agreement on U.S. budget are likely to help Istanbul Stock Exchange to test new record highs,” said brokerage Ata Invest.
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