Banking Index Pares Losses Following Moody’s Report

The Turkish Banking Index reversed losses from earlier in the session and now trades ~2% in the green following Moody’s decision to upgrade their outlook on the Turkish banking sector from ‘Negative’ to ‘Stable’.

• The benchmark Borsa Istanbul index also pared losses, and trades flat despite the downtick seen in major EMEA equity indices. The index recorded a fresh high yesterday, with bulls eyeing further gains toward the 8000.00 level. Similarly, the banking sub-index reached a record high last week.
• The rally in banking stocks accelerated last week alongside persistent public interjections from Simsek, who has stressed that easing credit conditions will arrive in the coming months, along with a slowing of inflation. Moreover, the CBRT have reiterated that they plan to simplify the existing macroprudential framework as part of the return to more conventional monetary policy – a move which should improve net margins of state banks.