Turkish Bonds Look Delightful

You may not get another chance to buy Turkish bonds at 15%. With Turkey's economy and financial markets making rapid improvements, the yield curve is far too steep in relation to economic conditions.

Investors are unlikely to get another chance to buy Turkish bonds at 15%. A few years ago, we published a report on Israel entitled Buy Bonds, Wear Diamonds, recommending that investors buy domestic bonds trading at 12% in nominal terms. Today, if you are lucky, you can get long-term Israeli bonds called Shahar or dawn' in English at around 6%. Even after such a remarkable compression of interest rates, we still like Shahar bonds and think that Israel's yield curve is too steep in relation to economic conditions. But we have even a better investment idea: Turkish bonds offering a 15% return.

Buy Turkish bonds: economic normalisation

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