Turkey Wake-up call: Macro, Political and Equity News, 24th November

BIST retreated 0.73% yesterday as the weakness in lira weighed on the sentiment, especially for the banks. Index had a slight uptick start and spent most of the day in positive territory after testing a daily high of 1,336 around mid-day. Things turned sour after 4:45PM as the selling pressure intensified, taking the benchmark BIST100 down below 1,300 before some rebound that brought a 15-point recovery in the last 30 minutes. Banking sector index was down 3.46% as none of the major names were spared by the sell-off. REITs, fertilizer stocks, KORDS, OTKAR, ULKER, EGEEN, HEKTS, and MAVI topped the non-bank gainers while TTKOM, PETKM, SAHOL, KCHOL, TCELL, DOAS, AKGRT, and IPEKE were among the weakest spots. Today, our local macro agenda involves November'20 Manufacturing Capacity Utilization Rate (that stood at an 8-month high of 75.4% in October'20 and was 77.2% back in November'19) and Real Sector Confidence index (was at 108.1 in October'20, the highest since May'18, and had stood at 102.0 back in November'19) both to be released at 10AM local time. Separately, the Treasury will issue 10-year fixed-coupon bonds and 7-year FRNs in double domestic borrowing auctions, wrapping up this month's borrowing programme. Domestic redemption is only TL0.36bn for the week while the total for the month stands at TL29.21bn vs a domestic borrowing target of TL10.0bn and the Treasury has raised TL3.31bn in the two auctions held so far. BIST seems off to a positive open given the supportive sentiment in global markets after the triggering of a formal transition process in White House to President-elect Joe Biden. U.S. futures are up over 0.7% in early trades and Asian markets led by Japan are mostly trading in the green. Direction of lira will be watched closely and USDTRY is at 7.91 levels in early trades vs 7.90 at yesterday's closing bell.