Bloomberg News

Turkish Stocks Advance to 4-Week High After Citigroup Upgrade

September 02, 2011

Sept. 2 (Bloomberg) -- Turkish stocks climbed to the highest level in four weeks on the first day of trading in three days after Citigroup Inc. recommended buying the country’s shares.

The ISE National 100 index advanced 1,429.19, or 2.7 percent, to 55,375.28, the strongest since Aug. 5, at the 5:30 p.m. close of trading in Istanbul. Turkiye Garanti Bankasi AS, the biggest listed bank by market value, jumped 3.8 percent. The stock market re-opened today after trading was halted mid-day on Aug. 29 for a public holiday.

Turkish equities were raised to “overweight” from “neutral” at Citigroup, which citing “severe” underperformance and easing inflation pressures. The Istanbul index has dropped 16 percent this year, the biggest decline among major emerging markets after India, as the country’s current-account deficit swelled to a record.

“The Citigroup upgrade could drive Turkish stocks even higher next week,” Ata Doganoglu, a trader at broker Ekspres Invest in Istanbul, said in response to Bloomberg questions via instant message.

Turkish shares trimmed their gains after a report showed hiring in the U.S. unexpectedly stagnated in August as employers became less confident in the strength of the recovery of the world’s largest economy. The MSCI Emerging Markets Index slipped 1.4 percent, trimming this week’s rally to 4.9 percent. Today’s gain in Turkey’s benchmark index left the gauge up 3.1 percent in the week.

Turkey ‘Oversold’

Turkish assets looked “oversold,” Geoffrey Dennis, Citigroup’s strategist in New York, wrote in a report dated Aug. 30. Turkey, which imports almost all the energy it consumes, is also set to benefit from the recent decline in oil prices more than most of its peers, he said.

Oil slipped 1.9 percent to $87.07 a barrel in New York, down 24 percent from this year’s high of $114.83 on May 2.

The retreat in oil prices helped ease pressure on the country’s inflation, the central bank said last month. The rate, which increased to 6.3 percent in July from 6.2 percent in June, will end this year closer to the bank’s 5.5 percent goal than a forecast of 6.9 percent that it made in July, governor Erdem Basci said on Aug 15.

--Editors: Mark Bentley, Stephen Kirkland

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Mark Bentley at mbentley3@bloomberg.net


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