The consequences of the decision of the American credit rating agency, Moody's Corporation, to reduce the degree of Turkey's rating is still grabbing a wide attention in the global economic analysis of the experts and professors of economics. The last of those analysis reports came from Germany by Mr. Garsten Hess, securities markets developing expert in Preng Berg Bank-Germany, who stressed that the Turkish markets did not care about the decision of Moody's Corporation and the Turkish economy has an enormous capacity for growth and development.
How do investors look at the reduction decision?
Mr. Hess valued the decision of Moody's Corporation to reduce the degree of Turkey's credit rating, saying that due to the pre-pricing, the response of the Turkish market to this decision was very slight, and due to the previous experiences, the bonds were traded independently from the credit rating agencies. He also added that professional investors are the ones who give the decision whether the country, which operates independently of the decisions of the credit rating institution, is suitable for investment or not.
Mr. Hess noted that the high demand on the bonds issued by the Turkish Treasury was the best proof that the international investors did never seriously take the decision of the international credit institution.
Strengths of the Turkish economy
Mr. Hess believes that the demographic characteristic of Turkey and the increase of its population boost of the investment attractiveness, and these features make the Turkish economy has a great potential to continue growing in the coming years. He added that, during the last twenty year, the population in Turkey has witnessed an annual rise of 1.5%, and it is expected to see an annual rise of 1% over the next ten years, at a time when the population in European countries is increasing negatively.
Moreover, Turkey's debt is much lower than the debts incurred on the European countries and for that too, Turkey can increase its investment and growth. Furthermore, any improves in the customs union agreement with the European Union will be a good support for the Turkish economy in the future.
Governmental steps to help the Turkish economy recovery
Mr. Hess admired the steps taken by the Turkish government in order to avoid any deterioration or economic downturn starting with the Turkish President, Recep Tayyip Erdogan, meeting with a number of investors and investment companies in New York while he was in the United States last week, and then a number of officials in the Turkish government held meetings with investors in London, in order to converge the views between the two sides on the recent decisions.
Mr. Hess, the securities expert divided the interests and tendencies of investors in Turkey into three categories:
- Bond investors: those who prefer to buy high-revenue bonds in Turkey (high-revenue bonds compared with Europe and the Western world) paying attention to the stable monetary category, so the profits of their investigation are linked to the central bank.
- Capital investors: those who care about corporate earnings, and not to be subjected to political threats in any form.
- Property investors and foreign direct investment: those who care about the long-term stability.
However, because of its low wages and strategic location in the Middle East, along with many other factors, Turkey is to be considered as one of the most attractive countries for foreign investors.