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

BIST lost 0.27% yesterday as the weakness in lira took a toll on the broader market and banking sector in particular despite the positive sentiment in global equities. After an uptick open and test of 1,130 level in early trades, index turned south and spent the bulk of the day below the neutral line. Banks lost 1.84% on average amid pressure on GARAN, HALKB, and TSKB. SISE and subsidiaries rallied along with its subsidiaries ahead of their merger on Thursday and were joined by TOASO, CLEBI, BRSAN, GLYHO, AKSEN, and CIMSA as major outperformers. On the other hand, TTKOM, TKFEN, ZOREN, DOAS, KRDMD, EKGYO, and HEKTS were among the weaker spots. Today, our local macro agenda highlight will be Treasury & Finance Minister Albayrak's presentation of the government's updated economic programme involving macro targets for the 2021-2023 period in a press conference starting 11AM local time. TurkStat will release the July’20 Economic Confidence Index at 10AM. The index had climbed 4.4% on a sequential basis to a 5-month high of 85.9 in August in the fourth consecutive month of recovery after touching its all-time low of 51.3 in April during the peak of the virus pandemic concerns. Lastly, BRSA will release banking industry aggregates for August'20 at 2PM local time. Cumulative industry profits stood at TL4.60bn in August'19 and at TL8.25bn in July'20. We predict a flattish open for the BIST as the ongoing optimism in global markets may be balanced out by the slide in lira (USDTRY at 7.8188 vs 7.7889 at yesterday's closing bell). U.S. futures are up 0.3% in early trades while Asian equities present a mixed picture.