Turkey Yields in Longest Rising Streak in 3 Years on Debt Sale

Turkey’s benchmark bond yields advanced for a sixth day, the longest rising streak in more than three years, as lower demand at yesterday’s debt sale cut investors’ appetite for the nation’s fixed-income securities.

Two-year yields increased 49 basis points in March, set for the biggest monthly advance since October 2011, as a bid-to-cover ratio at an auction of January 2015 fixed-coupon notes slumped to 1.37 percent, the lowest level since August 2012, according to data compiled by Bloomberg.

“Local buyers cannot carry bonds when foreign investors are absent,” Murat Yardimci, the head of trading at ING Bank AS in Istanbul, said in e-mailed comments. “Excess supply was evident from the bid-to-cover ratio in yesterday’s auctions.”

Yields on two-year benchmark notes added 1 basis point, or 0.1 percentage point, to 6.18 percent at the 5 p.m. close in Istanbul, the highest level since Jan. 7. The six-day advance is the longest stretch of gains since June 2009, according to data compiled by Bloomberg. The lira strengthened 0.4 percent to 1.8175 per dollar, rebounding from its lowest level since Aug. 30.

The Treasury sold 1.68 billion liras ($920 million) of January 2015 fixed-coupon notes at an average yield of 6.17 percent yesterday, compared with a 5.76 percent rate in a previous issuance of similar-maturity debt on Feb. 19. It also sold 2.19 billion liras of 10-year fixed-coupon bonds due March 2023 at 7.23 percent, above the 6.84 percent rate in an earlier issuance on Feb. 19.

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