Turkey Wake-up call: Macro, Political and Equity News, 19th July

BIST jumped 2.89% yesterday as Turkish stocks played catch up with the rally in global peers on Friday when we were closed. Banks outperformed with the 4.36% surge in their sector index as the major private lenders were leading. Benchmark BIST100 index closed at its daily peak in the broad-based move as recent non-financial laggards like EREGL, TUPRS, PETKM, AEFES, HEKTS, THYAO, and TAVHL staged a comeback while DOAS, EGEEN, LOGO, MAVI, and CCOLA stood out among the rare decliners for the day. Today, our local macro agenda showcases TurkStat's residential sales data for June22 due at 10AM local time. Home sales had jumped 107.5% yoy to 123k units in May on the back of 177.8% surge in mortgage-backed transactions as consumers sought wealth protection in real estate amid the high-inflation environment. May data had carried the cumulative YtD sales to 576k units, up 37.7% from a year ago, again mainly driven by the 72.3% jump in mortgage-backed sales from a low base. We predict a slight negative start for the BIST as the sentiment abroad has turned sour. U.S. futures are up c.0.2% in early trades in partial reversal of the 1.2-1.5% overnight losses after we left and Asian bourses outside of Japan are mostly trading in the red.