ECONOMY

Emerging markets weak, affect Turkey

ISTANBUL (Reuters) – Turkish markets ended mixed yesterday, amid a lack of new buying incentives and continued concerns over weakness in other emerging markets, such as South Africa. «In the absence of concrete news relating to the EU or IMF, the markets just drift,» said Debbie Orgill of ABN-Amro. «Also Turkey gets some spillover from what’s happening in South Africa.” The South African rand is hovering around three-year lows to the dollar. The Turkish lira firmed in after-hours trading yesterday, reaching as high as 1.5030 to the dollar after closing at 1.5135. The yield on Turkey’s July 16, 2008, benchmark bond rose to a fresh three-month high of 22.88 percent in inter-day trade, before easing back slightly to close at 22.71 percent. The Turkish Treasury held three debt auctions, selling 1.71 billion lira ($1.1 billion) of an August 13, 2008, bond, expected to be the new benchmark, at an average yield of 22.59 percent against expectations of 22.48 percent. «The yield remained up there. It looks slightly disappointing,» said Orgill. Istanbul’s main stock index rose 0.16 percent to close at 36,983.89 points. Political tensions between Turkey’s secular establishment and the Islamist-rooted government are clouding market sentiment, discouraging any strong gains. Yesterday, the head of Turkey’s military General Staff, General Yasar Buyukanit, warned of an Islamist threat to the country, repeating comments made in recent days by President Ahmet Necdet Sezer and other top military officers. But Buyukanit’s reaffirmation of the military’s support for Turkey’s bid to join the European Union brought some solace. «The comments from the general saying he supported Turkey’s EU bid helped a bit,» said Orgill. EU Enlargement Commissioner Olli Rehn will hold talks in Ankara with government ministers today and is expected to criticize Turkey’s reform progress, saying it needs to do more.