Türkiye positioned to benefit from shifting geopolitical landscape: HSBC
ISTANBUL
Türkiye’s fundamentals are solid and the country is also positioned to benefit from the shifting geopolitical landscape, HSBC analysts have said in a recent report.
Its strategic location makes it a likely beneficiary from potential reconstruction efforts in regions such as Ukraine, Gaza, Lebanon and Syria, they noted.
“To illustrate the scale of the reconstruction needs: Lebanon’s estimated post-war rebuild could cost around $25 billion, while Syria’s ranges from $400 billion to $1 trillion,” they said, adding that prior to the conflict, Syria represented 15 percent of Türkiye’s cement exports in 2010, a figure that stands at 4 percent today.
They underlined that Türkiye and President Recep Tayyip Erdoğan have maintained strong ties with both Russia and Ukraine.
“If a lasting ceasefire is reached, Türkiye could tap into reconstruction projects which the World Bank estimates will cost over $500 billion. This would bode well for construction-related names like cement and steel producers.”
Another key subsector is defense, which is set to benefit from the EU’s significant push to increase defense budgets, HSBC analysts said.
Turkish defense and aerospace exports surged 29 percent in 2024 to $7.1 billion.
“Despite near-term challenges, we believe the core long-term catalyst for Turkish equities remains intact: A strong commitment to conventional economic policy… We see opportunities amid the volatility and remain overweight in Türkiye,” they also said.
“Aviation continues to be one of our favorite sectors in Türkiye in terms of the growth outlook.”
They recalled that Türkiye expects to host 65 million total visitors this year, up from 62.3 million in 2024.
A reopening of some key markets, such as Russia, Ukraine and Israel, would also be a tailwind in terms of direct foreign inbound traffic, they said.
