Mobius criticizes headscarf move
Posted by meb at February 14th, 2008
As the debate in Turkey over the headscarf heats up, international investment guru Mark Mobius voiced a strong warning over polarization in Turkish politics, in essence defending the secular establishment.
Mobius, who manages nearly $40 billion through the Templeton Emerging Markets Fund, finds the abolishment of the law that prohibits wearing headscarves in universities ‘highly controversial.’
“We hope that Turkey has reached a point in its development, where the secularity of the system is ensured and cannot be fundamentally derailed,” he told business daily Referans. “Secularism is one of the key ingredients in the success of Turkey and has been the key ingredient of the developed West since it was adopted a few centuries ago.”
Noting the bad performance of the Istanbul Stock Exchange since the beginning of the year, Mobius said markets are “concerned about the slowdown of the reform process … and the structural weakness of the Turkish economy.”
Immediate concerns:
Factors such as Turkey’s high current account deficit, large energy bill, lack of competitiveness in the manufacturing and technology sector, overvalued currency and its dependency on foreign direct investment are “more immediate concerns” for the famed investor. “The government has to continue reforms and set more incentives for innovation and investments in the country,” he said.
Adding that he is prepared for a “protracted period of volatility,” Mobius said the dynamics in emerging markets are better than ever before. But, he continued, “we need a balance between solid growth and moderate inflation, progress and negative side effects such as global warming and carbon emissions need to be taken into account more seriously.”
“Many Turkish companies look attractive,” he said. “They have de-leveraged their balance sheets, shifted to local debt, expanded into the region diversifying their operational risks, begun to pay solid dividends, and even exporters were able to make money even though the YTL strengthened substantially.”
In terms of valuations, Turkey is “once again one of the most attractive, fast-growing markets we can find,” said Mobius. “It is time to take substantial measures as we will not see these prices again so quickly.” Still, investors need to be patient, as “when the European Union or the United States sneeze, Turkey will surely get a slight cold as we are observing right now.”
Mobius said he does not expect any weakening in foreign interest in Turkey and advised investors: “Buy Turkish stocks for the long-term. Do not speculate on short-term movements.”
International volatility:
The investor said he is prepared for a protracted period of volatility. “Once the U.S. elections are out of the way and banks have finally disclosed the full extent of subprime write offs, we can start from scratch and focus on fundamentals,” he said. “The dynamics in emerging markets are better than ever, but we need a balance between solid growth and moderate inflation, progress and negative side effects such as global warming and carbon emissions need to be taken into account more seriously.”
Recent figures point to a looming recession in the U.S., but “it is not clear,” he added. “Some economists believe the U.S. is already in inflationary mode. These economic cycles are normal. We need to see beyond that and anticipate evolving opportunities.”
Source: Turkish Daily News
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