Turkish Markets Weaken After C/A Deficit Exceeds Forecasts
Turkish markets weakened on Wednesday after the current account deficit sharply exceeded forecasts in March, fuelling concerns about overheating and Turkey’s vulnerability to external shocks.
The deficit widened 128 percent to a record $9.766 billion, central bank data showed, far higher than a Reuters poll forecast of $8.2 billion.
The lira eased to 1.57 against the dollar, the weakest since March 22, from an interbank close of 1.5570. The yield on the benchmark Feb. 20, 2013 bond rose to 8.5 percent from 8.39 percent a day earlier.
The İstanbul share index was down 0.79 percent at 66,732 points, underperforming the emerging markets benchmark MSCI index .MSCIEF, which gained 0.7 percent.
“Of course it’s alarming,” said Mehmet Besimoğlu, an economist at Oyak Securities in İstanbul. “It’s interesting that this is the first time the currency market has reacted immediately. … It’s a big credibility loss for the central bank, which has claimed that there is no overheating in the economy,” he said.
Banks led the wider share index lower as traders weighed up first-quarter results and a statement from Akbank said the central bank has ordered it to set aside some $742 million for three-and-a-half years in additional required reserves relating to a syndicated loan it took out through its Malta unit.
Akbank shares dropped 1.3 percent, while the banking index .XBANK was down 1 percent.
Yapı Kredi shares dropped 2.2 percent after it announced on Tuesday a first quarter net profit of TL 534.9 million, below a Reuters poll forecast of TL 546.1 million.
VakıfBank shares were up 0.5 percent. After the market closed on Tuesday it announced first-quarter net profit rose 34 percent to TL 409.19 million, exceeding a poll forecast of TL 340.6 million.
11 May 2011
SOURCE: TODAYS ZAMAN
