By Karin Strohecker and Jorgelina do Rosario
LONDON, Sept 26 (Reuters) - Ankara could tap international bond markets more than once before year-end, while a flurry of debt sales from Turkish firms will lift overall emerging markets high-yield issuance, said Stefan Weiler, head of CEEMEA debt capital markets at JPMorgan. Turkey's government and companies - usually regular and prolific issuers in hard-currency fixed income markets - had been largely absent in the run-up and the aftermath of the May election that saw President Tayyip Erdogan confirm his grip on power.
But recent efforts to shift the country to a more orthodox monetary policy after years of soaring inflation, a sliding lira and boom-and-bust cycles have seen a return of investor confidence.
Turkey still has $2.5 billion earmarked in its budget for issuance this year - but could possibly go further than that, JPMorgan's Weiler told Reuters.
"Turkiye already addressed 75% of their international financing budget, so it is reasonable to expect another issuance to complete the budget and as in past years, Turkiye may also consider pre-financing future needs if market conditions are favourable," said Weiler, declining to comment on the timing of any potential debt sale.
Foreign investors, positioned cautiously to Turkish assets in the run-up to the election, missed out on the strong rally and have now started reducing their underweight positions.
"There is a clear normalising path of monetary policy and confidence is also being clawed back by the authorities through a number of market-friendly appointments this summer," Weiler said.
Erdogan appointed respected markets veteran Mehmet Simsek as finance minister while former Wall Street banker Hafize Gaye Erkan became the country's first female central bank governor.
"There is a general feeling that Turkiye’s credit story is turning around, but this view is not necessarily universal and municipal elections next year will provide another important checkpoint," Weiler said.
Markets are expecting Turkey to come to market within days, though some are pointing to a country ratings review by S&P Global Ratings scheduled for Friday. Fitch earlier in September upgraded Turkey's foreign currency outlook to "stable". The country's dollar-denominated bonds maturing in 2034 currently yield around 8.5%.
Meanwhile the surge in confidence was reviving corporate bond sales. Domestic appliance maker Arcelik last week became the first Turkish corporate to launch an international bond since January 2022.