Following the Central Bank of Turkeyās (CBRT) tightening steps, appetite for Turkish lira (TL)-denominated instruments has regained strength. According to the April Market Professionals Survey (MPS) conducted by Spinn Consulting with 111 financial market participants, TL deposits and domestic fixed income instruments once again came to the forefront in portfolio allocations.
š° Strengthening Shift Toward TL Deposits
After nine months of neutrality, preferences are shifting back to increasing allocations. While 49.55% of participants recommend increasing weight in TL deposits, the share of āhold neutralā fell from 42.4% to 30.6%. This trend is supported by rising deposit rates following CBRTās rate hikes and relatively contained inflation expectations.
š Growing Interest in Fixed Income
In short-term domestic bonds, the recommendation to āincrease weightā rose from 30.5% to 39.6%.
In long-term bonds, it increased from 22.0% to 24.3%.
In both categories, the āneutralā view gained ground, while āreduce weightā recommendations declined.
š Uncertainty Prevails in Equities
The āneutralā sentiment that began in March for domestic equities persisted in April:
50.4% of participants recommend āhold neutralā for equities.
The āreduceā or āstrongly reduceā weight view, which had jumped from 13.1% to 35.6% in March, fell back to 26.1% in April.
š± Pullback in FX and Gold
The āincrease weightā view in FX instrumentsāwhich had exceeded 50% in Marchāshifted back to āneutralā in April:
46.8% recommended āneutralā for spot FX,
49.5% for FX deposits (DTH).
A similar pullback occurred in gold:
The āincrease weightā view dropped from 43.2% in March to 27.0% in April.
38.7% said āneutral,ā while 26.1% suggested āreduce weight.ā
š Stability in Foreign Instruments
The share of āneutralā in eurobonds declined from 54.2% to 47.75%, while āreduce weightā rose from 14.4% to 19.8%.
In foreign equities, the āneutralā view declined from 48.3% to 36.9%, while āincrease weightā climbed from 23.7% to 30.6%.
š June MPC Outlook: No Cut Expected, Focus on Funding Strategy
In the bonus question of the survey, responses from 110 professionals regarding the June MPC meeting were as follows:
46 respondents: No rate change; funding will continue through the upper band
43 respondents: No rate change; funding will shift back to weekly repo auctions
14 respondents: Expect an upward revision in the interest rate corridor
2 respondents: Expect a hike in the policy rate
5 respondents: Expect a downward adjustment in the corridor
Thereās no clear expectation of a rate cut, and consensus leans heavily toward maintaining the current levels.
š Portfolio Shifts Reflect Lower Weight in Equities and FX
Survey responses to portfolio allocation questions confirm this trend:
The share of domestic equities fell from 20.5% in March to 19.5% in April.
USD/TRY allocation dropped 3 points to 9.1%.
Allocations to gold, DTH, and eurobonds also declined.
Foreign equities rose by 1.65 points to 8.8%.
Meanwhile, TL deposits, with a 28.6% share, remained above equities for the second month in a row.The shares of short- and long-term bonds rose to 6.6% and 5.2%, respectively.
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