The fastest weekly rise in bank shares since November 2002

The move in Turkish bank shares on the stock market this week was the fastest rise since President Recep Tayyip Erdoğan came to power.

The Borsa Istanbul banks index is up 27 percent since the start of the week. The shares showed their best performance since November 2002, when the AKP won the elections and achieved a 44 percent weekly gain in bank shares. Türkiye İş Bankası A.Ş., of which CHP is a shareholder. with an increase of 35 percent.

NEW EXPECTATIONS OF MONETARY POLICY

According to Bloomberg, Swissquote Bank senior analyst İpek Özkardeşkaya said: “(If the opposition wins), Turkey is expected to end its ultra-loose monetary policy, stop intervention in the foreign exchange market and reshuffle an orthodox monetary policy.” .

“Turkish stocks rise not because investors are happy with higher interest rates, but because the valuation of companies has to readjust to a new exchange rate,” Özkardeskaya said.

CDS ARE AT THE LOWEST FOR THE LAST 1.5 YEARS

On the other hand, Turkey’s credit risk premiums (CDS) also fell to the lowest level since December 2021. CDS fell 75 basis points to 477 this week. The rally in Turkish assets accelerated after presidential candidate Muharrem İnce dropped out of the candidacy yesterday.

Investors have priced Ince’s withdrawal as increasing the probability of Erdogan’s defeat, while the iShares MSCI Turkey ETF, which represents the interest of foreign investors and trades in New York, has invested $14 million this week, registering the highest weekly entry since December 2021.