Turkey Wake-up call: Macro, Political and Equity News, 23th March

BIST took a 9.79% plunge yesterday with the activity getting halted by circuit breakers for the entire market as well as on stock-basis multiple times until almost all of the blue-chips fell to their 10% daily limits with no buyers in sight. A recovery attempt after noon-time was quashed by new waves of selling until the close. Banks were down 9.89% on average like almost everything else. Today, our local macro agenda is muted, except for Treasury reissues of 5-year TLREF-indexed bonds and 5-year CPI-linkers in double domestic borrowing auctions, wrapping up this month's borrowing programme. Domestic redemption is TL2.23bn for the week while the total for the month stands at TL29.04bn vs a domestic borrowing target of TL31.2bn while Treasury has raised TL17.47bn in the six auctions/placements held so far. More selling seems to be in the cards for the BIST given there was a further 3% limit down in the BIST30 index contract in yesterday's evening session. On a slight positive note and underlining the intense volatility, lira is somewhat stronger with USDTRY pair below the 7.86 level vs 7.9453 at yesterday's BIST closing.