Turkey Wake-up call: Macro, Political and Equity News, 27th June

BIST climbed 0.43% on Friday as Turkish stocks managed to reverse their earlier losses in afternoon trading, carrying weekly gains in the benchmark index to 0.82%. Banks failed to join the rebound with the 1.01% loss for their sector index amid pressure on YKBNK, GARAN, and TSKB. ASELS, SAHOL, OYAKC, AGHOL, DEVA, SELEC, and MAVI topped the gainers in the BIST100 universe while TAVHL, ENKAI, FROTO, AYDEM, GLYHO, and ODAS stood out among the weaker non-banks. Today, our local macro agenda is quiet while on the political front, President Erdogan will chair the Cabinet meeting starting at 3PM local time. According to reports, a possible mid-year hike in the minimum wage will be on the agenda of the meeting along with government adjustments to salaries of public employees and pensioners. BIST seems off to a negative start as the banking regulator imposed restrictions on lira lending to FX-rich companies with a decree issued on Friday evening. Lira is staging a rally after the decision with the USDTRY at 16.3630 as we go to print vs 17.3652 at the time of Friday's BIST closing bell. On a positive note, the upbeat sentiment in global bourses may provide some cushion to Turkish stocks, in our view.