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The 2014 Emerging EMEA Research Team: Turkey Equity Strategy, No. 1: Michael Harris & team
Bank of America Merrill Lynch extends its dominance of this lineup to a fourth consecutive year, under the guidance of London-basedMichael Harris, 44. Clients readily explain this crew’s staying power. The researchers “put a lot of weight on markets and investment style,” one fund manager says. “They’ll tell you whether you’re in a growth cycle, or value period, or when another investment style is warranted. It’s incredibly useful.” Adds another admirer: “While other strategists focus purely on economics, Michael does a great job making connections between economics and politics, markets and companies. That brings extra value to the table.” Since mid-December these strategists have maintained a somewhat bullish stance on the year-ahead prospects for Turkey. With the nation’s shares then off 21.5 percent from their late May high point — and trailing the broad emerging Europe, Middle East & Africa market by 20.7 percentage points — they upgraded the group from underweight to overweight, citing valuation and their expectation that Turkey’s troublesome current-account deficit would narrow. The imbalance did indeed improve, contracting from $8.32 billion in December to $4.88 billion a month later, but investors remained skeptical. The analysts, however, stood firm. In early February, after the central bank staged a defense of the lira in the form of a stunning 425-basis-point hike to its benchmark overnight lending and borrowing rates, to 12 and 8 percent, respectively, they reiterated their stance. The shares were then down 16 percent further, against the wider market’s 1.4 percent decline, but by the end of May had rallied 30.3 percent, besting their emerging EMEA peers by 22.3 percentage points since February. As last year, Harris also co-leads with Stephen Pettyfer thetop team in Middle East & North Africa Equity Strategy; and he captains the first-place squads inCEEMEA Equity StrategyandEmerging-Europe Equity Strategy. He left BofA Merrill in April, after 19 years with the firm, to direct coverage of Turkey for Renaissance Capital. |
