Unrealised potential
EU accession dominates Turkey's outlook, while Greece is still weighed down by public debt from the 2004 Olympics. But positive signs from the securitisation markets in both countries offer something to whet the appetites of investors. Laurence Neville reports
The eastern Mediterranean is a disparate region; the principal economies in that part of the world, Greece and Turkey, have seemingly far more to divide them than to unite them. Their common link is the European Union: Turkey appears to be following a path towards EU membership similar to that trod by Greece and investors are eager to gain from convergence within the region.
But investors face tough challenges in gaining non-government fixed-income exposure to Greece and Turkey through the bond and derivatives markets: the vast majority of issuance from both countries is sovereign. Accordingly, there is no credit default swap market other than that for the sovereign credit. And there have been only a handful of locally originated collateralised debt obligations.
Bankers are not optimistic about any significant increase in corporate issuance from Greece - it is, after all, a country of just over 10 million people with a limited number of large companies. But Turkey is viewed as a potentially substantial market: it has a population of 70 million and a diverse, rapidly growing and increasingly sophisticated corporate sector.
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