BlackRock is investing in Turkish equities.

BlackRock's Investments in Turkey are Increasing

Recently, Turkish equities have become one of the largest assets of Frontiers Investment Trust Plc, one of BlackRock's top funds. Turkish stocks, which have become a favorite among investors, have outperformed their rivals with a 98% performance over the past five years.

Economic Dynamics and Inflation

The managers of Frontiers Investment Trust, Samuel Vecht and Emily Fletcher, state that slowing inflation and stable interest rate cuts have created a positive environment for equities in Turkey. Currently, Turkey accounts for nearly 10% of the fund's assets, a much lower percentage compared to last year.

Opportunities in the Markets

Speaking to Bloomberg, Fletcher said, "We believe there are opportunities, which is why we allocated a significant portion of our portfolio to Turkey." The allocation to Turkey ranks third after Saudi Arabia and the United Arab Emirates.

Rise of the Local Market

Foreign investors had long avoided Turkish equities due to the depreciation of the lira and high interest rates. However, in recent months, the Borsa Istanbul 100 Index has risen by 15.2% in dollar terms, outperforming most emerging market indices.

Credit Rating Upgrade

Last week, Fitch Ratings updated Turkey's credit rating outlook to "positive," citing increased foreign exchange reserves and tight monetary policies.

Company Performances

Among the fund's assets in Turkey are companies like Akbank and MLP Health Services. These stocks have increased by 43% and 38%, respectively, since mid-October.

High Quality and Valuations

Vecht noted, "The quality of companies in Turkey is generally high, and many well-managed companies are present." He also emphasized that the price-to-earnings ratios of Turkish banks are quite attractive on a global basis.

Future Expectations

Fletcher pointed out that the biggest uncertainty in the Turkish markets is whether the process of decreasing inflation will continue. The Central Bank has revised its inflation target from 24% to 16%.

Fletcher stated, "If they can achieve this, many opportunities may arise."