MSCI Turkey underperformed the MSCI EM by 0.1% yesterday. BIST-100 gained 0.4%, closing at the level of 1,475 with a trading volume lower than the last 5 days’ average. Banking index gained 1.0% and industrials index gained 0.4%. Interest rate on 2-year benchmark bond rate remained flattish at 18.39% while 10-year bond rate inched up to 17.05% (up 7bps). TRY appreciated by 0.3% vs USD to 8.28 yesterday, while trading around same level this morning. In terms of local dataflow, Treasury Cash Balance (August), Treasury Issue: Fixed Coupon GB (02.09.2026), Treasury Issue: CPI Indexed GB (28.05.2031) would be watched today. We expect a positive opening for Turkish equities.
Today, Treasury cash balance of August to be announced at 05:30 p.m. (local time). Additionally, Treasury’s auction to be followed. There is no consensus available for the data (Jul.21: TRY-67.9bn, Aug.20: TRY+30.3bn).
Treasury would issue 5-year fixed coupon G-bond (TRT020926T17) and 10-year CPI Indexed G-bond (TRT280531T14). After these issuances 3 of 8 scheduled auctions for September to be completed. Treasury borrowed TRY4.2bn (includes non-competitive bidding) from the market via an auction.
Treasury concluded 2-year TLREF Indexed G-bond (TRT061223T11) auctions. The accepted term rate on the 5-year TLREF Indexed G-bond was 4.99%. The sale amount was TRY2.6bn (sale/demand ratio: 46.6%).
Treasury also sold TL1.5bn (sale/demand ratio: 67.9%) to the primary dealers prior to the auction in the non-competitive bidding (else TRY130mn –sale/demand ratio: 100% – sold to public institutions).. Accordingly, the total amount of the borrowings via this issuance was TRY4.2bn (sale/demand ratio: 54.5%).
Therefore, the total amount of the borrowings with 1 of 8 planned auctions for September reached to TRY4.2bn, covering around 11.8% of the TRY35.9bn redemption (also, 10.5% of domestic borrowing projection of TRY40bn for September completed).
CPI based Real Effective Exchange Rate (REER) increased by 2.7% MoM, but decreased by 1.6% YoY to 61.9 in August. Therefore, the REER increased for the second month in a row and reached the highest level since replacement of CBRT Governor in March. The last data is above of the previous historical low level of 59.7 which was seen in the previous month by 5.4%. Lira basket gained 1.9% whereas CPI increased by 1.12% MoM in August.
Source: Turkish brokerage reports