Two Different Stories in Capital Markets: A Journey Between Turkey and UK

Capital markets : A vibrant valley of opportunities at one moment, a drifting compass in rough waves at another. If you take the capital markets in Turkey and the UK, there are two worlds, two mindsets, two realities.

Turkey: Existing in the Shadow of Volatility

In recent years, the capital markets in Türkiye have been a sort of "hypertension patients". Even if the indices at Borsa Istanbul record fresh peaks temporarily, such peaks are not based on a healthy climate of confidence but on the rising interest of local investors seeking to shield themselves against inflation waves. With ups and downs of the exchange rate, measures of interest rates and sudden regulatory changes the investor today looks at the market screen with a touch of dread every morning.

"One of the market's fundamental characteristics", uncertainty is not only specific to the Turkish economy. Instability in the area of law, autonomy of the institutional structure and lack of transparency  are turning out to become a deterrence particularly for foreign capital. When discussed with wealth management companies, the following sentence can be heard frequently: "Turkey is a market with a potential but an unpredictable one."

England: Peace of the Safe Haven

When one approaches London, a complete different picture comes into view. An analysis conducted in the Financial Times during the morning is deciphered into prices by lunch time. One gets an idea how much the policy rate will increase in what month; announcements by the Central Bank are written into the literal meaning and not between the lines of the sentence. The capital market reacts to "structural data", not to "news".

The root cause of that stability is the power of institutional memory and the consistency of financial law. You can recognize a systematic similarity between the reporting style in a company that is quoted in the London Stock Exchange and the process of auditing a small-scale investment fund. Trust is a systematic result rather than an emotion in this case.

So Which One Is More Attractive?

The issue is not a comparison of a "good" vs. a "bad". The issue is really where you are located in the risk-return spectrum. Turkey is a high-return possibility with the right. But such a possibility requires critical insights, patience and forecasting abilities. The UK is stable but as a direct result to such stability offers lower but stable returns. For the investor the choice between the two markets is a question of finance as much as mind. One is safer to "sail in the rough seas"; the other is safer to "stay safe in the harbour". There are costs that attend but there are profits that attend too. Final Word, Financial markets are not numbers alone:

Capital markets are the reflection of the economic culture of a society

its political reflexes and institutional structure.

A capability to read the dynamism of Türkiye and the discipline of England is a valuable skill not only for investment but for the understanding of the world. Since at times one must know the spirit of the market not the numbers of the market.