Turkish Banks Climb as SocGen Turns More Optimistic on Outlook
(Bloomberg) -- Borsa Istanbul Banks Index rises 2.7%, most intraday since Feb. 13 as Societe Generale opts to increase exposure to Turkish banks and raises recommendation for Garanti and Isbank to buy from hold.
- SocGen prefers “better-capitalized” banks, London-based banking analyst Alan Webborn writes in report
- Says Garanti addressed its legacy asset quality issues and “impressed” with ‘strong commercial performance’ in 2016
- Isbank seen having improved profitability gap with its private banking peers at faster rate than predicted
- Garanti +2.9%, Akbank 2.3% and Isbank +3.3% as of 12:12pm in Istanbul
HIGHLIGHTS FROM REPORT:
- Says Turkish bank valuations remain toward low end of the long-term range
- “Having howled for sharp increases in the benchmark 1w repo rate, investors now appear satisfied with the recent unorthodox yet effective monetary tightening”
- Says 2017 risks have not disapperared:
- Referendum front: “A defeat for President Erdogan would be a setback for him, but we think this would be unlikely to provoke serious instability”
- Macroeconomic support seen stalling, though recovering slightly
- Weak lira “a burden for corporate sector and a constraint for investment”
- Turkey seen likely to avoid sharp the recession that bank shares’ current valuations reflect
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers AKBNK TI (Akbank TAS)
GARAN TI (Turkiye Garanti Bankasi AS)
ISCTR TI (Turkiye Is Bankasi)
People Alan Webborn (Societe Generale SA)
To de-activate this alert, click
hereTo modify this alert, click
hereUUID: 7947283