Turkish bonds, shares up on rating upgrade bets
Turkish bonds and banking shares rose on Thursday, boosted by hopes of further credit rating upgrades for Turkey, and amid widespread relief that German lawmakers approved new powers for the euro zone rescue fund.Analysts said there were hopes other credit ratings agencies could follow moves by Standard & Poor’s, which last week raised Turkey’s local currency rating to BBB-.
But as elsewhere, markets in Turkey hinged to a large degree on concerns over whether European governments will agree an effective response to a euro-zone debt crisis that threatens to cause a global economic downturn.
The lira closed at 1.8545 to the dollar on the interbank market, slightly weaker than Wednesday’s close of 1.8445. In illiquid after hours trade on Wednesday it had traded at 1.8720 — its weakest ever level.
The central bank’s sale of $70 million at its daily forex auction did not have a significant impact on the lira, but left it under pressure, after the higher dollar sales seen on the previous two days.
Markets are focused on the daily auctions to see how much support the central bank offers the lira.
Bank shares rose on speculation of further ratings upgrades, with the sector index gaining 2.28 percent and in turn driving the stock market to outperform its emerging peers.
“Rating upgrade expectations are holding the market higher,” said Altug Dag, a trader at EFG Istanbul Securities.
Istanbul’s main share index closed up 1.3 percent at 59,758.18 points, compared with an emerging markets index up 0.63 percent.
The yield on Turkey’s benchmark May 15, 2013 bond dipped to 8.34 percent from Wednesday’s 8.39 percent.
With authorities increasingly concerned about a pronounced slowdown due to global economic problems, Turkey’s Deputy Prime Minister Ali Babacan appeared to take a permissive stance over a target to reduce growth in bank lending to 25 percent for 2011.
Speaking at the Istanbul Finance Summit conference, Babacan said the authorities will not question banks that exceed the central bank’s target.
The bank wants to contain credit growth to rein in domestic demand and limit a record high current account deficit. Babacan said the deficit would be between 9 to 10 percent of GDP this year, and would fall next year.
With bank lending levels since the start of the year within target and trending lower, his comments had little impact on markets.
Among other shares, Akfen Holding rose 1.94 percent to 9.48 lira. TAV shares gained 3.1 percent to stand at 7.32 lira.
The firms said late on Wednesday they had signed an agreement with Credit Suisse to evaluate options for their stakes in TAV Havalimanlari Holding and TAV Yatirim Holding, raising speculation that they could opt to divest.
Among other shares, Akfen Holding closed 1.94 percent up at 9.48 lira. TAV shares gained 3.1 percent to stand at 7.32 lira.
The firms said late on Wednesday they had signed an agreement with Credit Suisse to evaluate options for their stakes in TAV Havalimanlari Holding and TAV Yatirim Holding, raising speculation that they could opt to divest.
30.09.2011
SOURCE: SABAH ENGLISH
