Turkey Wake-up call: Macro, Political and Equity News, 22nd February

BIST gained 0.28% yesterday as the late afternoon rebound led by some non-financial blue-chips helped the market shrug off the global concerns related to Russia-Ukraine tensions. Banks slightly fell behind with the 0.21% retreat in their sector index. EREGL, BIMAS, FROTO, TOASO, OTKAR, TTRAK, TAVHL, KARSN, and NTHOL topped the gainers in the BIST100 universe while TUPRS, ENKAI, ALARK, ENJSA, IPEKE, KOZAL, SELEC, and TRGYO stood out among the weaker spots. Coming to this morning, February'22 Manufacturing Capacity Utilization Rate (CUR stood at 77.6% in January'22 and was 74.9% back in February'21) and Real Sector Confidence Index (was at 109.5 in January'22 and had stood at 109.5 back in February'21) both to be released at 10AM local time. Separately, Treasury will reissue 4-year TLREF-indexed bonds and issue 10-year CPI-linkers in double domestic borrowing actions today, wrapping up this month's heavy borrowing programme. Domestic redemption is a massive TL51.09bn for the week while the total for the month stands at TL64.05bn vs a domestic borrowing target of TL49.0bn while Treasury has already raised TL42.71bn in the six auctions held so far. BIST is off to a negative start given the risk-off sentiment in global markets on escalation of the tensions in eastern Ukraine last night. U.S. futures are down 1.4% in early trades on top of the c.0.9% overnight losses after we left and Asian stock indices are all trading deeply in the red.