WOOD Flash – Turkey macro: current account close to the trough
The TCMB has released the preliminary current account (CA) data for December, showing a projected 5.3-5.5% deficit for 2020E, broadly in line with our expectations. In December, the CA posted a deficit of -USD 3.2bn, better than the -USD 3.7bn the consensus expected. The current deficit is slightly better than the revised -USD 3.6bn seen in November. Overall, we keep our view that there is growing evidence suggesting a genuine policy shift geared more credibly towards anchoring inflation at around 9-10%, instead of implicitly allowing a creeping up of inflation rates to double digits. Agbal’s recent statements in favour of a tight monetary policy stance until 2023E are in line with this view. We have revised our CA projections for 2021E, expecting a lower CA, at -3.0%, by end-2021E, but unchanged, at -3.5%, by end-2022E. This improves our fair value for the Lira slightly, from an 8.1 average to an 8.0 average in 2021E.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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