Lenders Akbank TAS and Turkiye Garanti Bankasi AS (GARAN) led Turkey’s equities index to the highest in more than seven weeks after Moody’s Investors Service raised the country’s credit rating to one level below investment grade.
The ISE National 100 (XU100) Index added 1.1 percent to 59,924.67 at 11:50 a.m. in Istanbul, on course for the strongest level on a closing basis since April 30. The gauge has risen in 13 of the past 14 days, extending its gain this year to 17 percent.
Moody’s raised Turkey to Ba1 from Ba2, citing improved public finances and policies to cut the current-account deficit. It said the outlook on the rating was positive. The country’s dual rates policy, introduced in October, is gradually reducing imbalances in Turkey’s economy while creating a “healthier” foundation for growth, Central bank Governor Erdem Basci wrote in an article in the Turkish policy magazine Iktisat ve Toplum in April.
Akbank TAS (AKBNK), the bank owned by Citigroup Inc. (C:US) and Haci Omer Sabanci Holding AS (SAHOL), added 1.6 percent to 6.28 liras, gaining for a second day. Turkiye Garanti Bankasi AS advanced 0.9 percent to 6.64 liras, and Turkiye Is Bankasi (ISATR) AS climbed 1.4 percent to 4.33 liras.
Among non-financial companies, Koc Holding AS (KCHOL), the country’s largest group of companies, jumped 1.9 percent to 6.56 liras. Turk Telekomunikasyon AS (TTKOM), Turkey’s largest landline telephone company, gained 2.8 percent to 6.68 liras.
The impact of the upgrade on Turkish equities may be limited given Turkey’s outperformance relative to peers in the past two months, according to Ata Doganoglu, a trader at Ekspres Invest in Istanbul. “We need investment grade for a long term impact.”
“I think the global market will still set the tone and give the direction here” and “if there are signs for new stimulus, we’ll perform better tomorrow,” Doganoglu said by e- mail today.
Turkish stocks have gained 23 percent on a dollar basis this year, compared with a 3.5 percent gain on the MSCI Emerging Markets (MXEF) Index, according to Bloomberg data.
To contact the reporter on this story: Benjamin Harvey in Istanbul at firstname.lastname@example.org
To contact the editor responsible for this story: Gavin Serkin at email@example.com