International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Russian opposition activist Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Russian opposition activist Navalny calls for supporters to take to the streets this weekend
One of Russia’s biggest wood product companies, Segezha could be Sistema’s next IPO
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
New Ukrainian VC firm QPDigital aims to invest up to $100 million in digital startups
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Estonian premier quits after Tallinn development scandal
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
OUTLOOK 2021 Czechia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
OUTLOOK 2021 Hungary
Hungarian government remains silent after Capitol riots
World Bank expects modest recovery for Europe and Central Asia in 2021
OUTLOOK 2021 Slovakia
FDI inflows to CEE down 58% in 1H20 but rebound expected
Slovakia to invest €1.2bn in digitisation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
BALKAN BLOG: The controversial recipe for building up Albania
Heavy flooding causes chaos in parts of Southeast Europe
Vodafone Albania plans €100mn infrastructure investments after AbCom merger
Turnover rose on Bosnia's two stock exchanges in 2020 while prices fell
Storming parliaments: New Europe's greatest hits
Kyiv accuses Bosnian President Dodik of lying about icon gifted to Russian foreign minister
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING THINK: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Zagreb Stock Exchange's Crobex10 index at highest level since March 5
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Kosovo
Arrera Automobili aims to launch Albania’s first supercar
OUTLOOK 2021 Moldova
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Moldova’s PM resigns to prepare the ground for early elections
Montenegrins say state administration is most corrupt institution
75% of Montenegrins want EU membership
Montenegro’s new ruling coalition carves up top state jobs
North Macedonia's manufacturing confidence indicator down by 8.5 pp y/y in December
OUTLOOK 2021 North Macedonia
Transparency International warns of high corruption risk in CEE defence sectors
OUTLOOK 2021 Romania
Romania’s central bank cuts monetary policy rate by 25bp to 1.25%
Romanian construction companies' activity slows in November after intense 2020
OUTLOOK 2021 Serbia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Slovenia’s dire COVID-19 situation in 4Q20 caused second economic dip
Turkcell denies any affiliation with $1.6bn loan in default extended by Ziraat Bank to Virgin Islands company
BEYOND THE BOSPORUS: Let’s tentatively pencil in a date for Turkey’s hot money outflow
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
Armenia’s PM cautions conflict with Azerbaijan “still not settled” after trilateral meeting with Putin
OUTLOOK 2021 Georgia
Georgia’s political kingpin Bidzina Ivanishvili quits politics
Modern-day “Robin Hood” inspires Georgians drowning in debt
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Iran’s navy conducts missile drill while analyst argues Trump even capable of nuclear strike in final days
TEHRAN BLOG: Who’s more credible? Johnson backing Trump’s Nobel chances or Iran applauding arrest warrant for US president?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
OUTLOOK 2021 Kyrgyzstan
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
China business briefing: Not happy with Kyrgyzstan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
Turkmenistan: The dammed united
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
OUTLOOK 2021 Uzbekistan
Download the pdf version
November 12 marked the end of the frequent struggle to work out whether it is hot money flows or the Turkish government’s invisible hand that is keeping Turkey’s markets afloat.
Turkish President Recep Tayyip Erdogan had stepped forward the previous day and, in so many words, declared that if required he would permit “bitter pill policies” if that was what was required to get the party shakin’ and a groovin’. The market-maker news services promptly put the music on.
Within 24 hours, the Turkey bloodhounds were lapping up big currency gains and 10%+ interest rates, swapping their lira for Turkish banks’ FX.
“BUY TURKEY” notes were raining down. There’s not a financial institution left that hasn’t issued one.
We have of course seen these parties before. And each time, the party ended in the cop shop.
This latest bash, however, has started out with a particularly wild mood, the likes of which has not been seen in a long time.
Let’s take a look at what could take the wind out of its sails.
1-) Erdogan can start talking in the wrong direction at any time and the market-makers can’t avoid the shower of manure that might follow.
Imagine the Boss decides to give an unexpected speech somewhere out in the Turkish provinces and out of nowhere headlines start crowding your trading screen:
BCD: 11:48 ERDOGAN: INTEREST RATES ARE EVIL.
BCD: 11:49: ERDOGAN TEARS A STRIP OFF FOREIGN SPECULATORS.
BCD: 11:50 ERDOGAN MAY BOMB CYPRUS.
BCD: 11:51 NEGATIVITY ON TURKEY AS MOOD SOURS.
BCD: 11:52 WHO SAW IT COMING? TURKEY’S GONE BIG NEGATIVE.
BCD: 11:52 TURKEY. INVESTORS CURSE HEADACHE FROM HELL.
BCD: 11:53 TURKEY INVESTORS FIGHT TO GET OUT THE DOOR.
2-) November 19: The scheduled monetary policy committee (MPC) meeting.
Bargains struck over the seemingly bolted-on hike in the main policy rate continue apace. At the moment, the finance industry wants a minimum 200bp. The stake will most probably rise.
Take care, the lira vultures may hand over Turkish assets to slower-arriving lira bulls if Erdogan does not surprise the market with a 100bp+ spread over the market expectation. Such a positive surprise is a small possibility as things stand.
Given that there is a higher probability that Erdogan wants to wave through something lower than what the finance industry wants, the lira vultures may already be passing on Turkish assets to the lira bulls and might certainly be doing so before the clock strikes 14:00 Istanbul time on November 19.
If Erdogan does not pull the plug on the shindig with a shock decision to hold the benchmark rate (there’s a low possibility of that at the moment), the party might continue with a lower-than-expected rate hike, though some people would get bored and leave.
3-) End-year position closures.
We’re in mid-November and many people will close their positions before the Christmas break.
Erdogan has a scheduled monetary policy committee (MPC) meeting on December 24. The serving of an appetiser on November 19 and inviting people to stay at the Casino Erdogan Royal Hotel for Christmas may be on the cards, but there’s no need to speculate so far and create confusion at the moment.
4-) “Sleepy Joe” Biden.
“Sleepy”—you know, the guy keeping THE LOSER awake at night—has already, without lifting a finger, drastically altered the career trajectories of some ministers, officials and sons-in-law at the Bestepe Palace in Ankara and in the Kremlin.
We shouldn’t expect any drastic moves by the new Mr President against Erdogan but that doesn’t stop certain headlines from rolling down your trading screen:
DCB: 12:49 BIDEN AIDE: ERDOGAN’S S-400s NOT ACCEPTABLE.
DCB: 12:50 BIDEN TRANSITION TEAM: TURKEY SANCTIONS QUESTION NEEDS ADDRESSING.
DCB: 12:51 SANCTIONS AND TURKEY.
DCB: 12:52 TURKEY AND SANCTIONS.
The US Congress may also show up in the picture during the budget process.
5-) Virus on the rise.
The markets right now seem happy with the liquidity sloshing around and are not particularly bothered by the virus. However, at any point of time, virus bears may show up during the winter. The situation with infections in the US is out of control. But Donald is watching television. Turkey might have the worst outbreak in the Middle East. Though you can’t know that because Erdogan does not release the figures.
6-) Erdogan cheats the markets by pumping lira to his voters but the market-makers say little to nothing.
The president’s “bitter pill” promises may be in circulation, but the number of people in Turkey committing suicide because they can’t feed their families has been on an upward trend for years. The situation is a little fraught shall we say.
If loan growth and fiscal spending continue at a fair clip, the market-makers may not be able to draw the curtain around it.
7-) Palace fight and domestic political turmoil.
There’s big comedy value to be had in the fact that the markets are partying again while there is a fight under way at the Ankara palace. At a certain point will it no longer be possible to conceal it from the market?
This is Turkey. Even Zeus, whose home is still being destroyed by Canada’s Alamos Gold, does not know what will happen in the next 10 minutes here.
The cops may raid the party and cut the music at any time.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: