Turkish bonds firmer, shares drift sideways, as everyone waits for IMF

ISTANBUL (Reuters) – Turkish bonds and the lira firmed yesterday while shares drifted sideways, as investors awaited news on a likely $10-billion loan from the International Monetary Fund (IMF) to help Turkey emerge from recession. On the bond market, the average yield on the July 10, 2002 bill fell nearly one percentage point from Friday’s levels to 74.81 percent, compared to a high of 77.95 percent when it was issued last week. The lira currency firmed to 1,445,000 against the dollar on the central-bank brokered spot market, compared with 1,450,000 on Friday. The main Istanbul share index closed 0.14 percent lower at 12,645.29, after touching a high of 12,938 points. Last week’s gains amounted to 8.84 percent. There may be a statement from the IMF on Friday, said Mukbil Yalcin at Ekspres Investment. The market will find its direction in line with that, he added. Brokers said an approaching religious holiday, in which markets will be closed, next Monday and Tuesday, along with declines in foreign markets, encouraged investors to cash in profits after recent sharp gains. Expectations that the USA might ease textile quotas pushed the textile sector index up 4.14 percent. Ready-to-wear manufacturer and retailer Vakko Tekstil was the biggest gainer, rising 21.15 percent. The company said yesterday it decided to raise its capital to 14 trillion lira from 5 trillion lira through a rights issue. Traders were optimistic about ongoing talks with an IMF delegation on a $10-billion addition to Turkey’s $19-billion crisis rescue pact to help the country manage its debt load. As long as the IMF talks go well there is nothing negative. So long as the tension doesn’t rise in the Middle East, we can’t see anything happening that would bring sales, said Ilker Ozparca, research director of Erciyes Securities. The treasury is to auction 147-day debt today, its latest bid to push maturities beyond the three-month period Turkey’s crisis-wracked markets have so far preferred. Bankers said the market was likely to stay thin ahead of that auction.

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