Turkey Wake up call: Macro, Political and Equity News, 21st August

BIST inched up 0.19% yesterday thanks to a late-day recovery after spending the bulk of the day in the negative territory. Banks underperformed with the 1.05% drop in their index as heavyweights GARAN and AKBNK came under pressure while the two state lenders managed to close higher. Market was again driven by the strength in petrochemicals stocks like PETKM and TUPRS that were joined by IPEKE, GLYHO, KRDMD, VESTL, HEKTS, AKSEN, YATAS, and TKFEN. On the other hand, BIMAS, KCHOL, PGSUS, KOZAL, SAHOL, CCOLA, and DOAS were among the weakest non-banks. Today, eyes will be on President Erdogan who is scheduled to disclose the good news that he mentioned two days ago as "heralding a new period for Turkey" in an event at 3PM local time. Similar to an earlier Bloomberg story, Reuters claimed the news is a major gas discovery in the Black Sea and quoted undisclosed sources suggesting the expected reserves of 800bn m3 could potentially meet Turkey’s energy needs for 20 years. On the macro front, August'20 Consumer Confidence Index compiled by TurkStat is due at 10AM. The index had retreated 2.7% from its 14-month high of 62.6 in June to 60.9 in July. Separately, Fitch has a scheduled review of Turkey's sovereign rating for today and any related announcements are expected to be released after European markets close. The 10 economists surveyed by Foreks predict Fitch to maintain its BB- rating (3 notches below the investment-grade) as well as the Stable outlook. BIST is off to a gap higher start given the upbeat local mood as reflected by lira (USDTRY at 7.28 levels vs 7.3496 at yesterday's closing bell) and the supportive backdrop among global equity peers.