This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Goldman Analysts Go Cold On Turkey (Update 1)

Stocks in this article: GS

Goldman Turkey story updated to include sharp reversal in Goldman view from a year earlier.

NEW YORK ( TheStreet) -- Goldman Sachs (GS) has gone from bull to bear on Turkey as the investment bank's analysts elaborate upon their recent cautious outlook for emerging markets countries in light of increased hawkishness from the U.S. Federal Reserve.

A team of analysts led by Singapore-based Christopher Eoyang lowered their view on Turkey to "underweight" from "overweight," citing a relatively high current account deficit, combined with the fact that much foreign investment in the country is from portfolio inflows (i.e. passive holders of stocks and bonds) which can be exited easily. They also pointed to a domestic credit bubble and an economy that relies on domestic as opposed to foreign demand.

"During a period of easing financial conditions, this combination is less of a worry, but as core rates rise, we believe it should become harder to invest in this story," the analysts wrote. The team of analysts is separate from the New York and London-based Goldman economists who argued last week that emerging markets' era of outperformance has come to an end .

In addition to lowering its view on Turkey, Eoyang's team sees "significant headwinds" and "vulnerable valuations," in Brazil and South Africa, where they were already underweighted. By contrast, they see "heavy discounts" in Korea and Mexico, where they remain overweight due to "better exposure and manageable risk in portfolio flows." They also see "heavy discounts" in China and Russia, though they remain neutral on those countries. They are also neutral on India and Indonesia.

The Goldman view sounds like a fairly sharp reversal from this video posted in April 2012 on Goldman's website. In it, Ahmet Akarli, Co-Head of New Markets Economic Research in Goldman's Global Investment Research Division, says "if we are right about our GDP forecasts going into 2050, then it is conceivable that Turkey can become the second largest economy in Europe, excluding Russia."

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs