Akbank TAS, Turkiye Garanti Bankasi AS and Turkiye Is Bankasi AS led gains on the Turkish stock market after Standard & Poor’s raised the nation’s credit rating to one level below investment grade.
Akbank and Garanti both rose 1.7 percent at the close in Istanbul. Isbank and Turkiye Halk Bankasi AS added 2.4 percent and 1.8 percent, respectively. The four lenders account for more than half of the advance in Turkey’s benchmark gauge by index points. The 16-member banking index jumped 1.8 percent to its highest level since Jan. 25.
S&P increased Turkey’s long-term foreign currency credit rating to BB+ from BB after the market closed yesterday. It cited a rebalancing in the economy, resilience to potential shifts in capital inflows and movement toward a political settlement to resolve tensions with Turkey’s Kurdish population as reasons behind the upgrade. Moody’s Investors Service also rates the country one level below investment grade.
“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.”
The Istanbul Stock Exchange National 100 index added 1.3 percent to 85,253.95 points, extending this year’s gain to 9 percent. That compares with a 2.3 percent decline this year in the MSCI Emerging Markets Index.
Moody’s raised the nation’s credit rating to Ba1 in June. Fitch Ratings upgraded Turkey to BBB- in November, the lowest investment grade-level and Turkey’s first such rating in 18 years.