Turkey Wake up call: Macro, Political and Equity News, 29th June

BIST added 0.46% on Friday, carrying its weekly gains to 0.93% despite the general risk-off sentiment in global markets. Index opened gap higher and traded in a tight range between 115.0-115.3k until mid-afternoon when the selling pressure started to trim the gains. Benchmark BIST100 dipped at 114.4k late in the day before staging a 300-point recovery in the last 20 minutes. Banks slightly underperformed the headline index with the 0.22% gain in their sector gauge with the heavyweights AKBNK and GARAN lagging. TTKOM, AEFES, FROTO, TOASO, ARCLK, MGROS, MPARK, ODAS, ZOREN, AKSA, AGHOL, and GLYHO topped the non-bank gainers while GUBRF, MAVI, DOAS, VESTL, and Koza Group names were among the weak spots. Today, TurkStat will release the June’20 Economic Confidence Index at 10AM local time. The index had jumped 20.4% on a sequential basis from its all-time low of 51.3 in April to 61.7 in May as the impact of the virus pandemic had started to dissipate. Separately, BRSA will release the banking industry aggregates for May'20 at 2PM. Cumulative industry profits stood at TL3.56bn in May'19 and at TL4.31bn in April'20. We foresee a negative open for the BIST given sour mood in peer markets. U.S. futures are barely changed in early trades, but we note the 0.7-0.8% overnight losses after the time we left on Friday. Asian equity benchmarks are all trading in the red amid concerns about the spread of the pandemic.