Turkey Wake up call: Macro, Political and Equity News, 25th August

BIST slipped 0.13% yesterday after spending the bulk of the day in positive ground as the weakness in lira seemed to have soured the sentiment in the last hour of trading. Banks fell behind with the 1.18% loss in their sector index amid pressure on GARAN and VAKBN. TTKOM, TCELL, VESTL, SISE, PETKM, IPEKE, and AKSEN were among the weakest of non-banks while BIMAS, KCHOL, TUPRS, MGROS, and GUSGR led the gainers. Today, our macro agenda involves August'20 Manufacturing Capacity Utilization Rate (CUR stood at 70.7% in July'20 and was 76.6% back in August'19) and August'20 Real Sector Confidence index (was at a 5-month high of 100.7 in July'20 and had stood at 102.5 back in August'19) both to be released at 10AM local time. Separately, Treasury will sell 4-year sukuk papers via a direct placement, wrapping up this month's heavy borrowing programme. Domestic redemption is TL0.57bn for the week while the total for the month stands at TL28.11bn vs a domestic borrowing target of TL19.0bn while Treasury has already raised TL13.34bn in the five scheduled auctions/placements held so far and another USD3bn via a Dollar-denominated sale to institutional investors. BIST is off to a slight positive open given the supportive sentiment abroad on hopes for progress in stalled U.S.-China trade talks. Lira is barely changed with the USDTRY pair cruising slightly below the 7.38 mark.