While the BIST 100 index continues to break records in Borsa Istanbul, Turkey’s 5-year credit risk premium (CDS) continues to decline.
The upward trend that started in the BIST 100 index after the elections in May continues to make investors smile.
The BIST 100 index, which was around 4,400 points on May 25 before the second round of the elections, rose by about 82 percent and exceeded the threshold of 8,000 points.
When the BIST 100 index is analyzed in dollar terms, it has tested the level of 300 points for the first time since January 2023, while the dollar-based return of the index has been around 2 percent since the beginning of the year.
When the sector indices are compared, it is observed that all sectors have increased since the beginning of the year, and the highest earner was sports with 107 percent.
While the profits of many companies exceeded expectations in the last balance sheet period, this situation was one of the factors supporting the rise in Borsa Istanbul.
Turkey’s credit risk premium fell by 300 basis points to 380 basis points
While one of the leading factors in this development was the new economy management and the management’s steps to reduce uncertainties, Turkey’s credit risk premium decreased by approximately 300 basis points to 380 basis points after the elections.
As a result of the policies implemented by the new economy management, foreign investors turned to the net buyer side in Borsa Istanbul after a long break. While foreigners were on the buying side for 9 weeks in a row for the first time since 2012 until the week of August 10, the total purchase in this period reached 1.93 billion dollars.
Moody’s, the international credit rating agency, also evaluated the effects of the policies implemented in the recent period on the Turkish economy, and stated that the outlook of the Turkish banking sector was upgraded from negative to stable.
Analysts noted that these developments increased the interest in Turkish lira assets and pointed out that foreign interest may continue, especially if Turkey’s CDS is permanent below 400 basis points.
Emphasizing that the Medium Term Plan (MTP) to be announced in September and the negotiations planned to continue with foreign investors are also closely followed, the analysts stated that the news flow from here may be determinative on the direction of the markets.
Analysts drew attention to the importance of the simplification steps taken by the Central Bank of the Republic of Turkey (CBRT) in the fight against inflation and the clear messages given. noted that it was perceived as positive.