Borsa İstanbul star of Emerging Markets but rally is stalling on account of bank valuations

Borsa Istanbul BIST-100 main index completed May at 10,400 points with an increase of 3.53 percent, as it  gained 39.23 percent in value since the beginning of the year. In dollar terms, the rally reached 27.41 percent. The stock that increased the most since the beginning of the year was airport operator Tav Airports, with 124 percent.

While the rally that started in the New York stock exchange this year, led by technology companies, it has also moved to the European and Asian share markets, and to Emerging Markets. The BIST 100 index soared on the back of risk-on sentiment, leaving behind important indices around the world in dollar performance.


BIST 100 index increased by 27.41 percent in dollar terms since the beginning of the year and reached 322.94 points, achieving its highest monthly closing since February 2015.


The most profitable sector was insurance

When the sector indices are examined in detail, it is seen that the banking index has increased by 72.79 percent and the conglomerates index by 45.88 percent since the beginning of 2024.

While all sector indices made investors happy this year, the biggest gainer was insurance with 90.30 percent. When we look at the main indices, the 51.93 percent increase in the financial index attracted attention.

When this process was examined on a stock basis, it was observed that 80 of the stocks included in the BIST 100 index gained value and 20 of them decreased. The most traded stocks in the January-May period were Turkish Airlines, Ereğli Demir Çelik, Türkiye İş Bankası (C), Yapı ve Kredi Bankası and Akbank.

Which stocks gained the most?

Among the stocks that have increased the most since the beginning of the year, Tav Havalimanları with 124 percent, Garanti BBVA with 93 percent and Anadolu Sigorta with 91 percent are in the first three places, while Qua Granite, Hektaş, 27 percent and Europower Enerji are the companies that lost the most value with 27 percent. happened.

Turkey’s 5-year CDS decreased to 261 basis points

Analysts emphasized that the steps taken by the economic management within the scope of the fight against inflation were effective in boosting stocks, noting that the increasing interest in TL assets continued with the improvement in confidence among domestic and international investors following the return to orthodox economic policies.

Drawing attention to the positive reports announced by international institutions and organizations for the Turkish economy, analysts reminded that international credit rating agencies increased Turkey’s credit rating.

While Standard & Poor’s (S&P) raised Turkey’s credit rating from “B” to “B+” last week, the organization stated in its assessment that it is thought that the coordination between monetary, fiscal and income policies will improve with the effect of external balancing following the local elections in Turkey. It stated that portfolio inflows will increase, the current account deficit will narrow, and a decrease in inflation and dollarization is predicted in the next 2 years.

Fitch Ratings also raised Turkey’s credit rating from “B” to “B+” at the beginning of March and increased its rating outlook from “stable” to “positive”. At the beginning of this year, Moody’s confirmed Turkey’s credit rating as “B3” and changed its rating outlook from “stable” to “positive”.


Will the stock market rally continue?

Analysts said that expectations for a rating increase in Turkey’s evaluation, which Moody’s is expected to announce on July 19, remain on deck if a permanent slowdown in inflation can be achieved in the coming period and a decrease in the current account deficit occurs.

Already,  Turkey’s 5-year credit risk premium (CDS) fell to its lowest level since February 2020 with 261 basis points on Friday, attesting to rising global interest.

While some experts suggest that FATF’s removal of the country from the gray list will be a catalyst for the rally, the end of profit realization by foreign funds will also be important.  While $6.5 billion entered the TL bond market in the last month, the Stock Exchange did not attract any hot money.  The fact that bank stocks, which are primarily preferred by foreign funds, technically entered the overbought zone, spoiled the sentiment.


Turkish sources, PA Turkey staff


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.