Turkish markets open weak after holiday

Turkish markets open weak after holiday

Turkish markets open weak after holiday

Turkish markets were closed for three days due to the Eid-al Fitr vacation that started on July 25.

The Turkish Lira and Turkish stocks began the day weak as markets returned from a five-day break for Eid al-Fitr, during which regional politics remained tense as Israel continued its bombardment against Gaza while Western countries announced fresh sanctions against Russia over Ukraine.

The dollar/lira ratio opened the first day after the holiday with a steep decline of nearly 1.5 percent, the highest level in two weeks. The ratio slumped down to 2.1395 in the afternoon trading.

The main stock exchange index, Borsa Istanbul (BIST) 100, also started off the day with a nearly 300,000-point slump to 82,600 points.

The benchmark 10-year government bond yield rose to 8.98 percent in very thin trade, up from 8.73 percent July 25.

While Turkish markets were on Eid-al Fitr vacation that started on July 25, other emerging markets sank, weighed down by concerns that tougher sanctions against Russia as well as robust growth data announced by the United States.

The U.S. economy rebounded vigorously in the second quarter, growing at a peppy 4 percent. The Federal Reserve remained cautious, sticking to its dovish stance after a two-day monetary policy meeting, still seeing some latent weakness that requires keeping interest rates low for the foreseeable future.

Meanwhile, Israel pressed ahead with its Gaza offensive throughout the holiday, raising tension in the region further.

Bank Asya shares tumble

Some companies were even hit harder in yesterday’s trading. Islamic lender Bank Asya fell 3.9 percent after pro-government broadcaster AHaber and newspaper Sabah quoted Prime Minister Tayyip Erdoğan as saying the bank was not in a good position and was seeking to sell assets to boost liquidity. “After Erdoğan’s comments, doubts are arising as to whether the bank will be able to find a strategic partner,” one Istanbul-based equities trader said.

Turkcell up on new deal

ISTANBUL - Reuters

Shares in mobile phone company Turkcell climbed 3 percent yesterday, boosted by news that Turkish shareholder Çukurova had agreed financing terms enabling it to recover a controlling stake in the company.

On July 25, a British court announced that financing terms had been agreed between Çukurova and its Russian partner Altimo which would enable it to recover the disputed Turkcell stake.

Sources familiar with the deal said Çukurova would secure the funding from Turkish state-owned lender Ziraat Bank and would make the $1.6 billion payment this week. Çukurova has been battling Altimo, the telecoms investment arm of Russia’s Alfa Group, for seven years for control of Turkey’s biggest mobile phone operator.