Banking share optimism boosts March foreign investor purchases in Borsa Istanbul

ISTANBUL

The $679.3 million in net share purchases in March by foreign investors marked a 231 percent rise from previous month, when net purchases were at $205 million. AA Photo

Attracted by banking shares, foreign investors made net purchases worth almost of $680 million in Borsa Istanbul throughout March, and almost made up the total 2013 sales amount with total net purchases in just two months.

According to figures announced by Turkey’s sole stock exchange Borsa Istanbul, the purchase transactions of foreign players amounted to $6.54 billion, while the sales size undertaken by them was $5.86 billion.

The $679.3 million in net share purchases in a month by foreign investors marked a 231 percent rise from previous month, when net purchases were at $205 million.

In January, in contrast, foreign investors had carried out net sales worth $487 million, as political concerns peaked during due to the corruption probe launched into a number of pro-government figures on Dec. 17.

Therefore, the total account of the first three months of 2014 shows that foreign investors have made net purchases worth $388 million since the beginning of the year, almost making up for last year’s loss. Under the influence of Fed tapering concerns and Turkey’s domestic political tension, foreign investors had recorded $429 million in net sales for 2013.

Around 78 percent of the March purchases, equaling $532 million in value, was in banking shares, Garanti Investment has stated in a note.

Shares in Turkish lenders Garanti Bank, Akbank, and Vakıfbank, as well as two companies whose representatives were among the suspects in the vast corruption and bribery investigation, Emlak Konut REIT and Halkbank, saw the biggest purchases by foreign investors.

Investors in banking assets traded at Borsa Istanbul have earned almost 25 percent over a month with the help of heightened optimism, after the Central Bank hinted that it may pay interest for required reserves.

The banking index, which has been on an upward trend due to the good mood fueled by hopes that the March 30 local election results will lead to political stability, accelerated the gains it had already seen after the release of Central Bank minutes on March 25.

The Central Bank said it may pay limited interest on banks’ required reserve lira deposits and, if needed, boost liquidity in the financial system to help counter any economic slowdown.