Halister News

(Bloomberg) -- Uncertainty regarding the referendum has been resolved with a “relatively market-friendly outcome pointing to no early elections in 2017,” analysts including Yarkin Cebeci write in a report.

• “We think this is a catalyst for investors to unwind the large UW positioning in Turkey relative to other high- yielding local currency EM assets”
  • Says high nominal yields, a stable currency and a central bank that is “likely to keep liquidity conditions tight” make local debt attractive
  • The central bank next meets April 26; JPMorgan expects “no change in the tight liquidity stance until the end of June”
• Stays long 10-year government bonds, fx hedged, targeting a move to 10.5%; remains market weight Turkish assets in their GBI-EM Model Portfolio “as we do not see an improving trend in the underlying structural drivers”
• NOTE: The yield on the nation’s 10-year notes fell as much as 30bps to 10.81% today; foreign investors bought a net $487m worth of lira-denominated bonds in the week ended April 7, central bank data last week showed
  • That’s the biggest inflow for any five-day period since September and the fifth straight week of net purchases from offshore funds as their share of the bond market rebounds from a five-year low