Şimşek Bets Capital Markets on Defense Industry Growth

Treasury and Finance Minister Mehmet Şimşek visited the SAHA 2026 defense industry exhibition this week, making a pointed statement about where Turkey's industrial future is headed. Standing among the country's leading defense contractors and technology firms, Şimşek declared that the defense sector is not just a strategic priority — it is the engine of Turkey's broader industrial transformation. The visit signals that the government is actively aligning fiscal and financial policy with the defense ecosystem's expansion.

Şimşek's key message went beyond patriotic rhetoric. He specifically tied the growth of Turkey's defense industry to the deepening of capital markets, arguing that as the financial system matures, it will channel stronger support into this ecosystem. That means more liquidity, more instruments, and — critically — more domestic funding for companies like Baykar, Aselsan, Roketsan, and their suppliers. The minister is essentially telling investors: defense is a priority, and we are building the financial plumbing to back it up.

This is not a coincidence of timing. Defense exports have surged past $5.5 billion annually, and the sector now employs over 75,000 people. With NATO commitments, regional conflicts, and domestic procurement targets all pulling in the same direction, government backing for defense-linked capital market development carries real weight. The question for investors is how quickly that financial infrastructure can catch up with the sector's ambitions.

Ekonomik Gündem Analysis: Ekonomik Gündem Analysis: From my years managing fixed income and equity portfolios at Turkish banks, I learned one rule: when a finance minister shows up at an industry event and specifically mentions capital markets in the same breath, money is about to move in that direction. Şimşek is not a man who speaks loosely — this is a deliberate signal.

Aselsan trades around 45-50 TL with a market cap approaching 200 billion TL. Roketsan and Baykar remain unlisted, but their supplier networks are publicly traded. If Şimşek follows through with deeper capital market tools — project bonds, defense-sector sukuk, dedicated VC structures — the valuation multiples on listed defense names could re-rate significantly. Aselsan currently trades at roughly 15x forward earnings, modest for a company growing revenues at 40%+ annually in dollar terms.

The banking angle matters too. Defense contractors are among the best credit risks in Turkey — government-backed revenues, long-term contracts, forex income. When capital markets deepen around this sector, it frees up bank balance sheets and creates new fixed income opportunities for institutional investors starved of quality domestic paper.

For small investors watching from the sidelines: defense-linked equity funds and Borsa Istanbul's BIST defense sub-index deserve a closer look. The minister just told you where the policy wind is blowing.

Kaynak: Haberturk Ekonomi