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Turkish Financial Markets

Last Notes

2024-01-24 09:23:10 GMT

Developments and Expectations in the Bond Market
According to Bloomberg HT survey, the market expects CBRT to raise the policy rate by 250 bps to 45% at tomorrow's MPC meeting. The bond yield curve has seen increases of up to 400-500 bps in the last month, especially in short maturities, due to the expectation that rate hikes will still continue.
After the CBRT's move this week, the message in the text may be decisive for the bond yield curve and TL interest rates in the market. It is noteworthy that the number of investors in TL-denominated borrowing instruments has continued to decline during the recent upward trend in TL interest rates. The rise in US bond yields and Turkey's risk premium CDS in January also seems to have had some impact on the rise in TL bond yields.

2024-01-24 07:26:56 GMT

Banking Sector 4Q23 Expectations
We estimate that banks in our coverage will post a 22% qoq decline in net income for 4Q23. Declining quarterly CPI-linked bond revenues and shrinking swap-adjusted net interest margin are the main factors dragging down profitability. TL loan growth is close to the previous quarter's level at 8%, but the deposit costs, which accelerated especially in the last months of the year, put pressure on banks' net interest margins. Banks' use of swaps increased during the period, while swap expenses almost doubled compared to the previous quarter. Fee and commission income continues to be supported by rising credit card interest rates. On the operating expense side, we expect a quarterly seasonal increase in the last quarter of the year. We expect loan loss provisions to increase due to some specific loan files. Another factor supporting banks' profitability this quarter was low tax rates. Banks' provisioning policies and revaluation gains lead to low tax rates for the banks.

2024-01-24 07:26:10 GMT

Turkish Markets Daily
We see flat trends ahead of Thursday's ECB and CBRT meetings. However, US equity markets have hit new highs. In the emerging markets, which started the year relatively weak compared to the developed markets, the news of the support package in China is supportive in terms of reaction buying on the new day.
On the Borsa Istanbul, which started the week with a horizontal trend, the BIST-100 index closed yesterday with a rise of 0.1%. At the beginning of the day, we expect limited reaction buying above the 7900-7850 support zone. The resistance zone that we will follow on a daily basis is 8100-8160. Locally, the day's data traffic is low, with consumer confidence figures and the parliamentary agenda to be followed.

2024-01-24 07:25:30 GMT

Before Opening
Ahead of tomorrow's ECB meeting, manufacturing and service sector PMI data will be monitored in the US and Europe today. On the domestic agenda, Sweden's accession to NATO was approved by the Turkish Grand National Assembly yesterday.
At the start of the day, futures S&P500 index +0.1% and futures MSCI GOP index +0.1% have a limited positive trend. Ahead of the CBRT's Monetary Policy Committee meeting tomorrow, MSCI Turkey index has a negative divergence of 1% compared to MSCI Emerging Markets index on a weekly basis. 5-year Turkey CDS has risen by 10 bp since Friday's close. MSCI Turkey index lost 1% yesterday led by banking stocks and continued its negative divergence on a weekly basis.
At the start of the week, we expect the BIST-100 index to move closer to the 7900-7850 region, which is the first level we expect to stand out in corrections, while we anticipate reaction buying above this region. 8050-8100 region is the resistance range we will follow in the first stage. Unless the 8150-8160 region is exceeded, we consider the rises as a reaction, while we attach importance to the 7850 region for additional volatility risk.

2024-01-19 07:20:59 GMT

Before Opening
The postponement of Fed rate cut expectations and the news flow regarding geopolitical risk appetite caused global equity markets to start 2024 with a weak trend and US bond yields to rise. As of the last trading day of the week, positive expectations for chip manufacturers support reaction buying in a weak outlook. At the start of the day, the futures S&P500 index -0.1% and the futures MSCI GOP index +0.2% have a horizontal trend.
The weakness on the global front caused the recovery in Borsa Istanbul to lose momentum after a positive start to the year. The weekly return on the BIST-100 index is 0.3%, the index continues to fluctuate between 8000-7980 support and 8110-8160 resistance range. On a day with weak data traffic, limited reaction buying can be seen above the support zone. Unless the 8110-8160 zone is exceeded, we do not expect the recovery to gain momentum. In case of a break in the 7980 support zone, the short-term correction pressure towards the 7900-7800 range may increase.

2024-01-19 07:10:18 GMT

Turkish Markets Daily
The postponement of Fed rate cut expectations led to a weak start to the year for global markets. On the last trading day of the week, positive expectations for chip producers supported reaction buying in a weak outlook. The weakness on the global side caused the recovery on the Borsa Istanbul to lose momentum after a positive start to the year. The weekly return of the BIST-100 index is 0.3% and the index continues to fluctuate within the support range of 8000-7980 and resistance range of 8110-8160. On the day when data traffic will decrease, limited reaction buying can be seen above the support zone. As long as the 8110-8160 level is not breached, we do not expect the recovery to gain momentum.

2024-01-12 11:26:32 GMT

Midday Notes
The highly anticipated Moody's decision of the week is announced today (Moody's credit rating for Turkey is "B3" with a "stable" outlook). Balance sheets are starting to be announced in the US.
BIST30, foreign inflows, which have been prominent especially in the banking sector for the last two months, started to slow down. BIST30 reached the channel resistance at 8600. However, extra momentum is needed to overcome this region. Following the 7840-8600 reversal, volatility may increase in both directions and the struggle in search of direction will continue. Support levels for the day can be monitored as 8490-8400 and resistance zone as 8520-8600.

2024-01-12 10:05:01 GMT

Before Opening
On the global front, despite ECB President Lagarde's interest rate cut messages, yesterday's higher than expected CPI data in the US and rising oil prices due to geopolitical risks have led to a volatile outlook. On the last trading day of the week, futures S&P500 index -0.1%, futures MSCI GOP index +0.3% with a mixed trend. On the global agenda, 4Q23 corporate balance sheets (JP Morgan, BofA, Citigroup, Wells Fargo) to be announced in the US today will stand out.
In December, S&P upgraded Turkey's rating outlook to positive while Moody's did not make any changes. It should be noted that Moody's rates Turkey one notch lower than S&P and Fitch. Prior to this agenda item, MSCI Turkey index outperformed MSCI Emerging Markets index by 4.9% since the beginning of the week. In the BIST-100 index, 7900 and 8000-8050 are the resistances we follow for the near term.
While approaching the 8000-8050 region, we maintain our view that the rise may lose tempo in the short term. In possible corrections, 7700 and 7600 levels are the short-term support levels we follow.

2024-01-12 10:03:37 GMT

Turkish Markets Daily
Despite ECB President Lagarde's rate cut messages, yesterday's higher than expected CPI data in the US and rising oil prices on geopolitical risks led to a volatile global outlook. On the global agenda, 4Q23 corporate earnings (JP Morgan, BofA, Citigroup, Wells Fargo) to be released in the US today will stand out. On the local front, Moody's review of the credit rating outlook will be on the agenda.
In December, S&P upgraded Turkey's rating outlook to positive, while Moody's made no changes. It should be noted that Moody's rates Turkey one notch lower than S&P and Fitch. Prior to this agenda item, the MSCI Turkey Index had outperformed the MSCI Emerging Markets Index by 4.9% since the beginning of the week.
On the BIST-100 index, the 7900 and 8000-8050 levels are the resistances we are following in the short term. As we approach the 8000-8050 area, we maintain our view that the rally could lose momentum in the short term. In the event of a correction, the 7700 and 7600 levels are our short-term support levels.

2024-01-12 10:02:22 GMT

Developments in the Eurobond Market
Market pricing has crystallized that the Fed will start cutting interest rates this year. According to the Bloomberg data screen, the first rate cut is expected in May. At the end of October, this expectation was reflected in US bond yields and the decline in interest rates led to additional declines in EM risk premiums and Turkey CDS premium. If foreign fund inflows intensify as a result of the economic policies implemented in Turkey and US bond yields decline further during the year, Turkish eurobonds may see additional value increases compared to today.

2024-01-11 15:36:52 GMT

Cryptocurrency message from Minister Şimşek
10.1.2024
Treasury and Finance Minister Mehmet Şimşek said, "We are finalizing our work to regulate and supervise the crypto market."
https://i.bigpara.com/i/55big/%C5%9Fim%C5%9Fek(6).jpg
Efforts are underway to remove Turkey from the partially compliant category in the FATF. Treasury and Finance Minister Mehmet Şimşek said that the regulations have reached the final stage within the scope of this development.
Minister Şimşek said, "The legal regulation on crypto assets has reached the final stage."
With the regulation to be made, the Capital Markets Board will license crypto asset trading platforms. Similar to financial institutions, they will have to meet minimum operating conditions.

2024-01-11 14:50:35 GMT

TCMB weekly securities, money and banking statistics
For the week ending January 05 2024, the weekly data on securities, international reserves and foreign currency deposits released by the TCMB can be found below in graphical and tabular format.
https://drive.google.com/file/d/1D-OxCKNdDYwdiVaoni2BUFQClpCyulSF/view?usp=drivesdk

2024-01-11 13:08:25 GMT

Midday Notes
US inflation is the headline of the day. On the other side, CBRT Governor Hafize Gaye Erkan will meet with international investors in NYC. After all these developments, Moodys' will start to be expected. BIST30 is clinging to the bearish channel resistance at 8600. Following the 7840-8600 reversal, volatility may increase in both directions and the struggle in search of direction will continue. Divergences within the banking sector may also continue. Support levels for the day can be monitored as 8550-8500 and resistance zone as 8600-8650.
Translated with DeepL

2024-01-11 13:01:13 GMT

Developments and Expectations in the Bond Market
We expect CBRT to raise interest rates by 250 basis points to 45% at the January MPC meeting. With the impact of the tight monetary policy, the real return in TL, which is based on the expected inflation level, continues to increase.
The fact that domestic interest rates are higher than offshore TL rates may create an attraction for investors who prefer to access TL assets through the swap channel. However, swap channels may need to be stretched somewhat in the coming period. It is noteworthy that the number of investors in TL-denominated debt securities funds has declined in the recent period when bond yields have increased. If the aim is to generate returns, it may be more sensible to enter these funds when interest rates are high. In monetary policy, there may still be some upside potential in short bond yields until interest rate hikes stop.