Akbank TAS (AKBNK), Turkiye Garanti Bankasi AS (GARAN) and Turkiye Halk Bankasi AS (HALKB) led gains in Turkish equities after Standard & Poor’s raised the nation’s sovereign rating to one level below investment grade.
Akbank and Garanti rose 0.6 percent each to 9.4 liras and 9.5 liras, respectively, at 11:09 a.m. in Istanbul. State-run Halkbank advanced 0.8 percent to 19.15 liras. The 16-member banking index rose as much as 1.4 percent to its highest intraday level since Jan. 28. The Istanbul Stock Exchange National 100 index gained 0.5 percent to 84,634.33 points, extending its climb to 8.2 percent this year.
Standard & Poor’s raised Turkey’s long-term foreign currency credit rating to BB+ from BB after the market closed yesterday. The agency cited a rebalancing in the economy, resilience to potential shifts in capital inflows, a well- capitalized banking industry and movement toward a political settlement to resolve tensions with Turkey’s Kurdish population.
“If Moody’s Investors Service also considers the positive developments regarding the Kurdish issue, it can follow with an upgrade to investment level,” Ayse Colak, executive vice president at Tera Brokers in Istanbul, said in e-mailed comments today. “We expect Turkey’s positive decoupling from other emerging markets to continue on expectations of such a move.”
Moody’s raised Turkey’s credit rating to Ba1 in June, also one level below investment grade. Fitch Ratings upgraded Turkey to BBB- in November, the lowest investment grade-level and Turkey’s first such rating in 18 years.
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