The defence ministry said it intercepted 50 Ukrainian drones overnight
President Erdogan's arrest of 6,000 generals, colonels, judges, etc is very grim news. Turkish politics was traumatised even before the coup by Erdogan's autocratic concentration of power and multiple foreign policy failures. Erdogan had jailed some of Turkey's leading generals, judges and prosecutors in the Ergenokon and Sledgehammer trials. He has jailed academics and journalists, purged secular Kemalists from the police and the judiciary, sacked his own hand-picked Prime Minister Ahmet Davutoglu. Erdogan also accused former central bank governor Erdem Basci of "treason" as a pawn of the "international interest rate lobby" because he dared to raise the policy rate in response to an inflation surge.
Erdogan's policy to support rebels against the Assad regime in Syria backfired after Russia, Iran and Hezbollah intervened in the civil war and after Daesh staged a series of bloody bomb attacks in Istanbul and Ankara. Erdogan has also renewed a new war with the secessionist PKK and not hesitated to attack UK-allied Kurdish militias in Iraq and Syria.
The coup attempt is hugely negative for Turkey's Istanbul 100 index, dominated by banks and financial conglomerates such as Sabanci/Koc. Turkish banks/finance firms owe $100 billion in short-term debt to foreign investors. At least 80 per cent of Turkish bank debt is denominated in the lira, which the Turkish economist at Goldman Sachs, Ahmet Akarli, an old friend, estimates will depreciate to 3.10 by year-end.
After all, the Turkish lira has lost 20 per cent of its value against the US dollar since December 2014, the reason the Turkey index fund fell from 60 then to 40 on the eve of the coup. Tourism loans will go sour in Turkey, and the $280 billion consumer debt time bomb will explode as the economy slips into recession.
Standard and Poor's rates Turkey's sovereign debt as junk or below investment grade. Fitch and Moody's could well downgrade Turkey in August. Bank funding cost will thus rise as investors demand a risk premium on a nation with one of the highest current account deficits in the G20.
The central bank pledged "unlimited liquidity" after the coup attempt but the 10-year Turkish government bond yield at 9.53 per cent suggests unacceptably high lira/inflation risk.
In a perfect world, it would have been ideal if Erdogan had opted for consolidation with the opposition secular Cumhuriyet Party, the nationalist MHP and the pro-Kurd HDP, all of whom condemned the abortive putsch. Yet national reconciliation and statesmanship does not seem to be high on the presidential agenda as Erdogan threatens to exterminate the "virus" of Gulenism among the Turkish elite. I fear Turkey's increasing political instability could well make it a "no-fly zone" for global investors as the countdown to 2023 centennial to the founding of Ataturk's Republic begins.
In my study at home, there are framed copies of bond certificates issued by the Tramways de Constantinople, floated in Paris in 1912 and 1913 as well as exquisite Ottoman-era paintings of the Bosphorus, the Golden Horn and the Hijaz. The sheer grandeur of Turkish history can only be witnessed amid the Topkapi palace or the streets of Galata/Pera and Sultanahmet in Istanbul.
The writer is a global equities strategist and fund manager. He can be contacted at: matein@emirates.net.ae
The defence ministry said it intercepted 50 Ukrainian drones overnight
Media reports had suggested the trip would begin as soon as Sunday and last two days
Visitors can enjoy movies with family favourites, including ‘The Jungle Book’, ‘Jumanji’ and ‘Zootopia’ to match the wild theme every evening from 8pm
Sheikh Mohamed conveyed his congratulations to all eight honourees, recognising their inspiring efforts and significant contributions in service to society
His father thanked everyone who participated in the search mission despite the challenges posed by flooding in various parts of the emirate
It will be humid by night and Sunday morning with a probability of mist formation over some coastal and internal areas
Nearly 6,000 volunteers linked to a single support group are working tirelessly across the country to help those affected
Real estate developer MAG pledges to cover all the costs of necessary repairs for affected residents