JPMorgan upgrades Türkiye stocks to ‘overweight’ amid economic optimism

JPMorgan has raised its investment recommendation for Türkiye’s equities from “neutral” to “overweight,” pointing to improving economic conditions and attractive valuations.

The move comes amid a 30% minimum wage increase in December, a 250 basis-point interest rate cut by the central bank, and inflation data that came in lower than expected.

Economic indicators support market optimism

According to JP Morgan’s latest report, these economic factors have contributed to a more favorable outlook for Türkiye’s stock market.

The bank noted that low foreign investor participation and attractive valuations provide strong upside potential for equities in the medium term.

JPMorgan analysts anticipate that interest rate cuts and economic recovery in the first half of 2025 will have a positive impact on the stock market.

BIM added to CEEMEA top 10 list

The bank also announced that Türkiye-based retailer BIM has been added to its “CEEMEA Strategy Top 10” list. Analysts expect the Turkish lira’s real appreciation to support BIM’s performance going forward.

Potential 27% market upside

JPMorgan highlighted that Türkiye’s stock market continues to trade at a 47% discount compared to emerging market peers. If valuations return to historical discount levels, the market could see a 27% upside.

Additionally, the report pointed out that foreign investor participation in Borsa Istanbul has declined from 55% to 26% in recent years, suggesting room for increased foreign inflows.