Turkey Wake-up call: Macro, Political and Equity News, 14th December

BIST surged another 3.24% yesterday as the recent rally continued unabated and benchmark BIST100 managed to close at a new high above the 2,100 level. Banks joined the party this time with a 3.04% gain in their sector index as YKBNK and ISCTR caught some bids. TUPRS, EREGL, PETKM, ASELS, KRDMD, AKSA, SOKM, and AEFES outshined their BIST100 peers while PGSUS, DOAS, TRGYO, GLYHO, and ODAS were among the rare decliners for the day. Today, our local macro agenda involves the residential sales data for November’21 due at 10AM local time. Home sales had climbed 14.9% yoy to 137k units in October as mortgage-backed transactions increased 9.7% from a year ago after months of yearly declines. October data had carried the cumulative YtD sales to 1,087k units, down 15.2% from a year ago, mainly due to the 60.7% plunge in mortgage-backed sales. Separately, Treasury will reissue 9-year CPI-linkers and separately offer 2-year sukuk papers via direct sale in double domestic borrowing actions today, wrapping up this month's relatively easier borrowing programme. Domestic redemption is TL18.52bn for the week while the total for the month stands at TL21.52bn vs a domestic borrowing target of TL10.0bn while Treasury has already raised TL5.31bn in the three auctions held so far. We anticipate a slightly positive open for the BIST despite the retreat in global bourses on renewed concerns over economic risks from the omicron virus strain. S&P futures are up c.0.2% in early trades in partial recovery of their 0.5% overnight losses after we left while Asian stock markets are all trading in the red. Lira is a tad weaker with the USDTRY pair around the 14.00 mark vs 13.7740 at yesterday's closing bell.