Turkey under ratings cosh

摘要

Turkey is at the mercy of the ratings agencies in the coming weeks, as fixed income investors say a decision from Fitch and a pending review from Moody's are black clouds hanging over the country that could have a significant impact on its capital market plans. Fitch opined on Turkey's BBB- stable rating following the market close on Friday, after IFR went to press, while Moody's is due to complete its own review on Turkey's Baa3 rating by mid-October, • after already completing a largely positive early review at the beginning of August. "Market expectations of a rating downgrade have come down post-Moody's early review but are not going away, in my view," Delphine Arrigi, portfolio manager at Old Mutual Global Investors, told IFR. "Turkey is back on [the] track of an unsustainable growth model solely driven by domestic demand and high current account deficits. [It's] a model that has traditionally led to boom-and-bust cycles." A muted reaction to Turkish government auctions last week prompted BNP Paribas analysts to argue that investors were wary ahead of the Fitch review. And Turkey's Eurobonds have been weaker in recent days, with the sovereign's US$1.5bn 26s down 0.5 points since the beginning of last week to 98.84, while at the long end of the curve, the US$3bn 43s were down 0.75 points to 96.58, according to Thomson Reuters.