High inflation, TRY devaluation and negative real interest rate have lead investors to seek yields. While foreign exchange (FX) rates have been tentatively stabilized with the FX-protected TRY deposit accounts (TRY) since December 2021, the policy rate, which has decreased since September 2021, paved the way for investors to withdraw from fixed yield TRY assets against annual inflation, which reached 61.14%.
The Borsa Istanbul Stock Exchange has been the first choice for investors. Borsa Istanbul’s BIST 100 Index, which moves differently from the global markets despite the Russia-Ukraine war and an economic slowdown, has returned 26.5% on a TRY basis and 15% on a USD basis since the beginning of the year. The 3-month consumer inflation hovers around 22.81% according to the Turkish Statistical Institute (TurkStat). The yield of the BIST 100 Index on a TRY basis made a gain for investors.
The MSCI (Morgan Stanley Capital International) index also shows that Turkey has topped among developing countries in Europe with a 12% return on a USD basis since the beginning of the year. Borsa Istanbul’s BIST 100 Index, which has recently broken successive records, is nearing 2,400 points, the highest figure recorded on December 17. Although the transaction volume couldn’t reach the record of TRY 91bn on December 17, it is among the top 10 transaction volumes at TRY 62.7bn. Analysts say that a period when FX rates and the stock exchange rise together is beginning and warned that investors aiming to protect their fortunes by purchasing equities should be careful and selective.
In the meantime, Borsa Istanbul closed with strong gains yesterday, hitting a new record high of 2,345.20. Starting the day at 2,329.06 points, the BIST 100 index jumped 1.24%,or 28.80 points, from Wednesday’s close of 2,316.40 points. During Thursday’s trading, the BIST 100 hovered between 2,329.06 and 2,350.80 points. 77 stocks rose, 20 fell and three were flat compared to the previous close. Closing the day with a market value of around TRY 1.9tr, the benchmark index posted a daily trading volume of TRY 39.7bn.
DAILY AGENDA
The year-end inflation expectation rose from 40.47% to 46.44%, while the year-end USD/TRY expectation increased from 16.68 to 16.85 in March, compared to the previous month, according to the Survey of Market Participants prepared by the Central Bank.
The Trade Ministry will release the results of the survey conducted for foreign trade expectations for the second quarter.
The Treasury and Finance Ministry will release the central government’s domestic debt statistics for March.
The Istanbul Chamber of Industry (ICI) Turkey Export Climate Index will be announced.
Industry and Technology Minister Mustafa Varank will attend the inauguration of the second-hand online selling and buying platform VavaCars’ Pendik Expertise and Renewal Center.
Energy and Natural Resources Minister Fatih Donmez will attend the farewell ceremony of the Yavuz Drilling Ship.
Meanwhile…
>> Total FX sales to state-owned enterprises (SOEs), including BOTAS Petroleum Pipeline Corporation, amounted to USD 3.24bn in March. FX sales to SOEs from the Central Bank’s reserves have reached USD 18.34bn over the past five months.
>> Residents’ FX deposit accounts dropped by USD 1.6bn to USD 215.92bn in the week ending on April 1, compared to the previous week, according to the Central Bank.
>> The total amount in FX-protected TRY deposit accounts rose from TRY 610.42bn to TRY 695.69 in the week ending on April 1, compared to the previous week, according to the Banking Regulation and Supervision Agency (BDDK).
>> The Central Bank’s international net reserves increased by USD 446m from USD 15.95bn to USD 16.4bn in the week ending on April 1, compared to the previous week. The bank’s total reserves rose by USD 924m from USD 108.03bn to USD 108.96bn in the same period.
>> Foreign investors’ net equity and government debt securities (GDS) acquisitions totaled USD 10.1m and USD 103.8m, respectively, while their net corporate bond outflow from Turkey amounted to USD 3.6m in the week ending on April 1, according to the Central Bank.
>> The number of daily coronavirus cases fell below 10,000 in Turkey. Some 9,354 new coronavirus cases and 36 deaths due to COVID-19 were reported in the last 24 hours by the Health Ministry.
