Despite a general election in June this year, foreign capital inflows into Turkey will continue, according to Standard Ünlü, the Turkish brokerage and investment arm of Standard Bank Group.

Atilla Köksal of Standard Ünlü says there is a risk of increased currency volatility due to Central Bank interventions in the market.

Ünlü and General Manager Atilla Köksal were speaking at a press conference marking the 15th anniversary of the company.

“We expect bigger initial public offerings [IPOs] this year, especially in the first half,” said Ünlü. “In mergers and acquisitions, we expect foreign investor interest in sectors such as retail, media, pharmaceuticals and infrastructure.”

The company arranged foreign investments of $2 billion in 2010 and aims to double the figure this year, according to Ünlü.

“We expect economic growth at around 4.5-5 percent this year,” he said. “Due to the demand pressure and the rise in commodity prices, we think inflation may reach 7 percent in 2011.”

The current account deficit is still the weak link of the Turkish economy, according to Ünlü, who said this gap would continue to pose risks this year due to a strong currency and economic growth.

The Standard Ünlü CEO also said this year Turkey could receive an investment grade from rating agencies. Such a development will mainly have an effect in the credit markets, according to Ünlü. “Over the long term, initial public offerings will also be facilitated.”

“Due to the process and methods, foreigners do not prefer to take part in privatizations,” Ünlü said. “Still, electricity distribution privatizations are better structured and foreigners may display interest in these.” He added that profitability in the banking sector would decrease, as credit expansion will be limited to between 20-25 percent.

Köksal said there was a risk of increased currency volatility due to Central Bank interventions in the market to slow down the appreciation of the Turkish Lira.