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

BIST climbed another 1.43% yesterday, extending its winning streak to the fourth day. And it was also the fourth consecutive day of relative underperformance for the banks that added 1.03% on average as heavyweight GARAN lagged peers while YKBNK remained strong. TUPRS, ASELS, SISE, TRGYO, OYAKC, KORDS, ALARK, and REITs led the non-bank gainers while ENKAI, MGROS, TCELL, TTKOM, GLYHO, and ISMEN stood out among the rare decliners in the BIST100 universe. Today, our local macro agenda seems to be quiet apart from Treasury's reissues of 4-year fixed-coupon bonds and 10-year CPI-linkers in auctions and separate offer of 2-year sukuk papers via a direct sale in triple domestic borrowing actions today, wrapping up this month's borrowing programme. Domestic redemption is TL6.81bn for the week while the total for the month stands at TL31.05bn vs a domestic borrowing target of TL33.5bn while Treasury has raised TL15.22bn in the four auctions/placements held so far. On the political front, President Erdogan will host Dutch Prime Minister Mark Rutte in Ankara starting at 4:30PM local time and before that, he is scheduled to speak at an event for the World Water Day at 2PM. BIST is off to a slight negative open given the softer outlook for European markets and small losses in U.S. futures following FED chairman Powell's statements last night while Asian markets are holding up better. We also note the ~1.6% negative impact of today's cash dividend payments on the benchmark index.