Buy Turkish banking stocks, BNP Paribas says
BNP Paribas said investors should buy Turkish banks, saying they are priced cheaply compared with peers in other emerging markets.
The country’s banks trade at a discount of 41 percent to competitors elsewhere, based on estimated price to earnings for 2018, BNP said in a report e-mailed to clients on Monday. That makes them good value, even when considering an expected increase in interest rates, it said.
BNP included state-run Vakifbank in its list of recommended financial stocks, citing its attractive price-to-earnings and fee growth outlook. The list also included Akbank and Garanti Bank due to their capital adequacy ratios and provisioning, it said.
“Rising rates are not constructive for bank earnings in the initial two quarters due to duration mismatch, but from the third quarter onwards spread expansion starts to kick in,” BNP said.
The French bank also added Aksigorta, an insurance company, to its recommended list.