Sell-off of Turkish stocks continues for fifth consecutive week

By bne IntelliNews June 9, 2016

Foreign investors continued to sell Turkish stocks last week as they remain wary of the rising political pressure on the central bank following the recent the cabinet reshuffle. The escalating violence in the country, following two bomb attacks this week, will likely add to investors concerns prompting more sell-offs in the short term.

There was an outflow of $96mn from Turkey’s equity market last week, data of the central bank showed on June 9. That followed an outflow of $702mn over the previous four weeks.

The central bank also said the bond market saw an outflow of $50mn in the week ending June 3, negatively comparing with an inflow of $435mn over the preceding three weeks.

Turkey has been rocked by two car bomb attacks this week in Istanbul and the south-eastern town of Midyat, both targeting police forces but civilians also lost their lives. Prime Minister Binali Yildirim holds the PKK responsible for the attacks. “We will continue to fight against not only the terrorist organisation but also their supporters”, said the prime minister, signalling that the government may tighten the screws on the pro-Kurdish party HDP.

This week President Recep Tayyip Erdogan signed a controversial immunity bill that critics say is aimed at removing the pro-Kurdish opposition party HDP from parliament.

NON-RESIDENTS' HOLDINGS OF EQUITY AND GOVERNMENT DOMESTIC DEBT SECURITIES ($ mn)
(Market Value)	03/06/16	27/05/16	20/05/16	13/05/16	06/05/16	29/04/16	22/04/16	15/04/16	08/04/16
STOCK
EQUITY	43,225.8	43,541.6	42,311.2	43,521.9	44,114.5	50,278.3	50,352.3	49,426.1	47,455.4
GDDS (*)	35,302.6	35,019.3	34,277.7	34,690.3	34,751.5	36,868.1	36,876.5	35,725.8	34,618.6
Repo	4,084.2	4,061.4	4,152.5	4,257.7	4,247.5	4,478.4	4,572.4	4,799.3	4,730.3
Private Sector	968.2	952.6	1,000.2	1,006.1	1,009.6	1,008.7	1,008.1	992.4	1,011.8
NET TRANSACTONS (Adjusted for Foreign Exchange and Market Price Effects)
EQUITY	-96.4	-65.5	-163.6	-174.3	-298.3	10.1	84.4	335.5	-64.8
GDDS (*)	-50.0	0.3	166.1	268.3	-182.6	-81.7	176.5	878.6	-4.5
Repo	-1.5	-175.7	-38.7	48.0	-22.0	-105.7	-334.7	54.9	25.5
Private Sector	15.7	-47.6	-5.9	-2.6	0.9	0.6	15.7	-19.3	-4.5
source: tcmb

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