Fundamental Analysis of the Rally Morgan Stanley analysts noted that the 25% rise in the BIST 100 since the start of the year can be attributed more to a widening price‑to‑earnings multiplier than to corporate profitability.
The P/E ratio has climbed from 5.9x to 7.6x, indicating that the market is no longer in line with macroeconomic fundamentals.
Bond Market and Inflation Two‑year Treasury yields have not shown a significant decline.
Inflation expectations remain around 10% twelve months out, implying that the market’s P/E ratio is below what inflation expectations would justify.
Risk Warnings Factors that could increase selling pressure and raise risk premiums include February inflation surpassing forecasts, Middle East tensions pushing up oil prices, and a slowdown in the disinflation process.
Conclusion Morgan Stanley emphasized that the rally in the Istanbul Stock Exchange is not supported by macro fundamentals and that markets are operating on a fragile balance, urging investors to exercise caution.
Morgan Stanley Warns of Rising Correction Risk in Istanbul Stock Exchange
Morgan Stanley cautions that the recent rally in the Istanbul Stock Exchange may be unsustainable, citing a widening P/E ratio and macroeconomic misalignment, and warns of risks from inflation, oil price volatility, and Middle East tensions.
Sources
- bursatv.com.tr · baglanti