2009-10-12
Turkish markets quiet before rate meeting
ISTANBUL, Oct 12 (Reuters) - Turkish markets were mixed on Monday as investors await a central bank interest-rate meeting this week and a decision on a possible loan deal with the International Monetary Fund.
The benchmark ISE National 100 stock index rose 1.56 percent to 51,002.98, its third day above the psychologically important 50,000 mark. The MSCI index of emerging markets rose 0.38 percent.
The yield on the benchmark Aug 3, 2011, benchmark bond rose to 8.02 percent, from Friday's close of 7.92 percent. The lira traded at 1.461 against the dollar, compared with a close on Friday of 1.4620. It was stronger still in Tuesday-dated trade at 1.4585.
The central bank is expected to cut its benchmark borrowing rate by 50 basis points at its monetary policy committee meeting on Thursday to a new record low of 6.75 percent, a Reuters poll of 19 economists showed.
The bank has cut rates by a total of 950 basis points since November last year in a push to stimulate the economy, which saw a record contraction of 14 percent in the first quarter.
"The IMF and central bank rate-cut decision will help sustain positive sentiment," wrote Erkan Savran, head of research at AK Investment in Istanbul, in a note.
The government is expecting an answer this week from the IMF on a long-awaited loan accord ahead of the presentation of its 2010 budget, Star newspaper reported on Monday, citing unnamed economy sources.
The government has prepared a Plan B in case it does not reach a loan deal with the IMF which envisages drawing funding from privatisations and bringing back funds held abroad by Turkish businesses, Star also said.
Economy Minister Ali Babacan said last week technical talks with the IMF will resume in the coming days.
Dogan Yayin, Turkey's biggest media company, fell 1.74 percent to 1.13 lira after rising more than 5 percent earlier in the day.
The decline pared Friday's 12.12 percent rise, when Dogan Yayin said it had provided collateral while it appeals a record $3.3 billion tax fine, easing investor concerns it would struggle to arrange the guarantee without selling assets.
"There had been fears about whether it would be able to provide such a large amount of collateral," said Emre Balkeser, a sales trader at Finans Invest in Istanbul.
"However, there is the possibility the tax office may not accept it ... Statements could be made by both sides, and the legal process continues, so we expect volatility."
Dogan Holding, Dogan Yayin's owner, fell 3.6 percent to 1.07 lira, reversing earlier gains.
Garanti Bankasi, Turkey's third-largest bank, was the most-traded stock, rising 1.6 percent to 6.35 lira.
