Akbank Advances as MSCI Increases Index Weight: Istanbul Mover

Akbank Snaps Six Days of Losses
Customers use automated teller machines outside an Akbank TAS branch in Istanbul. Photographer: Kerem Uzel/Bloomberg

May 29 (Bloomberg) -- Akbank TAS, Turkey’s second-largest listed lender in which Citigroup Inc. sold part of its stake last week, snapped six days of losses after MSCI Inc. said it was raising the company’s weight in its Global Standard Indices.

The shares jumped 3.4 percent to 5.50 liras at the close in Istanbul, their biggest gain in more than two months.

Akbank’s “foreign inclusion factor” on MSCI indexes will be increased to 0.45 from 0.3 at the close of trading on May 31, MSCI said in an e-mail today. The decision comes after Citigroup Inc. reduced its 20 percent stake in the lender to 9.9 percent, according to the e-mail.

“I am looking for outperformance for Akbank now that the overhang is over,” Isik Okte, chief strategist at Halk Invest, the Istanbul-based brokerage for state-run bank Turkiye Halk Bankasi AS, said in e-mailed comments. “This FIF increase will help, but overall Akbank’s year-to-date underperformance was unwarranted given fundamentals. Most of it was due to the Citi sale overhang.”

Akbank shares have fallen 8.6 percent this year, compared with a 5 percent gain for the Turkish banking index.

The shares dropped 15 percent in the previous six days of declines, pushing the stock into oversold territory on some technical indicators.

The lender’s closing price of 5.32 liras yesterday was below its 200-day moving average of 6.53 liras.

The stock’s 14-day relative strength index slumped to 16, with readings below 30 suggesting in technical analysis a security may rebound. The index rose to 27 today after the shares bounced.

The “foreign inclusion factor” reflects the percentage of the total number of shares of a company that are not subject to strategic shareholdings and or foreign shareholder ownership or investment limits, MSCI said.

Fund managers often use the MSCI indexes as benchmarks for allocating their own investments according to different company and country weightings. Consequently, changes in the indexes often produce a flow of money in and out of a given stock or country.

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net