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

BIST climbed 0.58% yesterday thanks to a wave of buying in industrial blue-chips in the last 2 hours of the session and despite the weakness in lira. Banks again lagged the broader market with the 0.92% loss for their sector index. Steelmakers, GUBRF, ENJSA, AYGAZ, TKFEN, and Koza Group names led the gainers in the BIST100 space while ASELS, PGSUS, TTKOM, OTKAR, YATAS, and TRILC were among the fewer weak spots of non-banks. Today, our local macro agenda involves Treasury's reissues of 8-month zero-coupon bills and 7-year FRNs and separate offer of 2-year sukuk papers via a direct sale in triple domestic borrowing actions, wrapping up this month's heavy borrowing programme. Domestic redemption is TL32.58bn for the week while the total for the month stands at TL46.25bn vs a domestic borrowing target of TL40.0bn while Treasury has already raised TL29.55bn in the seven auctions held so far. A slight positive open is in the cards for the BIST on the back of the supportive sentiment in global markets and some respite in lira's recent slide (USDTRY around the 9.3250 mark vs 9.3184 at yesterday's closing bell, but off the early morning highs of over 9.37). U.S. futures are up a few points while Asian markets are almost all trading in the green.