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Newsmakers

Turkey’s Scramble to Avert Financial Woes Met with Some Relief

The lira rallies with moves to curb betting against it and the introduction of new loan restructuring programs.

By Vishesh Kumar

Turkey unveiled a slew of measures on Wednesday as it sought to avoid the further escalation of a financial distress. Market reaction to the emerging market’s financial woes are being closely watched by investors as a gauge of broader sentiment.

Turkey moved Wednesday to make it harder to bet against the battered lira—down 20% in August—while unveiling measures that could make it easier to restructure sharply distressed corporate loans.

Investors cheered the moves, with the lira gaining nearly 4% in trading Wednesday. The iShares MSCI Turkey ETF climbed 3.6% in trading.

Turkey continued to put in measures to make it more costly to short the Lira. Turkey’s banking regulator also introduced new measures to allow banks to extend maturities, refinance loans, seek new collateral, extend new loans to companies, and demand that assets be sold to repay loans.

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The move comes as a diplomatic standoff and increasingly protectionist measures in trade relations mount between Turkey and United States.

Market reactions to Turkey will be key in gauging broader investor sentiment. How the measures are received, whether the currency weakness spreads to other emerging markets, and the impact on broader risk assets can help inform investor sentiment to the robustness of global economic growth.

The country remains reticent to interest rate hikes even as investor pressure for them mounts amid the distress.

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Home > News > Risk > Church of England Pensions Board to Slash 50% of Its Public Equity
Risk

Church of England Pensions Board to Slash 50% of Its Public Equity

Agency to de-risk from stocks in favor of infrastructure, greater diversification.

By Chris Butera

The £2.6 billion ($2.9 billion) Church of England Pensions Board will cut half of its public equity holdings as it makes big changes to its portfolio, IPE.com reports.

In favor of a 20% allocation to infrastructure, the church pension board said in its annual report it will slash its stock weight to 35% from 70% of its return-seeking portfolio.

The move will be implemented over the next 10 years to shield the fund from volatility as well as boost diversification within its investments, the report said.

The church also plans to add exposure to types of infrastructure, debt, and private equity that are dependent on contractual income.

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In addition, the board will continue to raise its stake in US private debt through the rest of 2018, said IPE. The pension board will also begin a global private equity program.

The church pensions board is the sole trustee for four pension plans: the Church of England Funded Pension Scheme, the Clergy (Widows and Dependents) Pension Fund, the Church Workers Pension Fund, and the Church Administrators Pension Fund.

Although the report is for 2017, the board did not post its results until last month. It returned 9.4% for the year, largely thanks to its emerging markets portfolio, which gained 28%.

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