Warning on Turkish bonds as yields spike to record highs

Aberdeen's emerging market debt team has warned against investing in Turkish local currency government debt after yields spiked to record highs.

Yields on Turkish 2-year local currency government bonds hit 10.9% yesterday, up from 8.4% at the end of September. Today they were trading at 10.3%. It left Turkish bonds as the most expensive of all the emerging markets tracked by J.P. Morgan Chase, with yields even surpassing those of Hungarian five-year government bonds which reached highs of 9.87% last week. Aberdeen's Brett Diment, who manages the recently launched Aberdeen Emerging Markets Bond fund, upped his exposure to Turkish government bonds in the last few weeks from an underweight to a neutral weighting. However, Dime...