Bloomberg News

Turkish Banks Snap Record Losing Streak as Sell-Off ‘Overdone’

November 25, 2011

Nov. 25 (Bloomberg) -- Turkish banks snapped their longest losing streak on record, gaining for a first day in 10 as investors took cues from Europe to snap up shares after a sell- off some traders said was “overdone.”

The index of 16 Turkish banks rose 2.3 percent to 100,266.69 at the close in Istanbul, paring its loss over 10 days to 11 percent. The index had slumped as much as 2.5 percent before rallying as European markets, including Germany’s DAX Index, rebounded.

“Yesterday’s sell-off was overdone,” said Funda Afacan, a trader at BGC Partners in Istanbul. “Buying started after the DAX turned positive.”

Banks rallied after Reuters cited European Union officials as saying that euro-area nations are considering dropping private-sector involvement from their permanent bailout fund as they discuss wider treaty changes. Germany’s DAX jumped as much as 1.9 percent.

Turkiye Garanti Bankasi AS, the largest listed bank by market value, rose 2.4 percent to 5.92 liras. Akbank TAS, the bank part-owned by Citigroup Inc., gained 3.8 percent to 5.96 liras.

Turkish banks will probably retain almost all of their profit this year to boost capital, rather than pay dividends to shareholders, chief regulator Tevfik Bilgin said in Ankara yesterday after markets closed.

The narrowing of Turkey’s current-account gap could be rapid should a sharp slowdown in bank lending observed over the past 10 days persist, Central Bank Governor Erdem Basci said at a conference today in Istanbul.

Denizbank AS, Belgian bank Dexia SA’s unit in Turkey, which is in a process of evaluating options for a sale, surged 7.7 percent to 14.05 liras. Finansbank AS, the Turkish unit of National Bank of Greece, gained 2 percent to 4.05 liras.

--Editors: Linda Shen, Robert Valpuesta

To contact the reporter on this story: Benjamin Harvey in Istanbul at

To contact the editor responsible for this story: Gavin Serkin at -0- Nov/25/2011 11:22 GMT

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