ISTANBUL, Jan 6 (Reuters) - Turkish bond yields hit a fresh all-time low and shares gained for a fourth straight day on Thursday, boosted by a successful government bond issue and growing hopes of a sovereign rating upgrade.
The auction of the 30-year, $1 billion Eurobond, the first issue from an emerging market this year, saw high demand at a competitive yield, analysts said, as traders speculated that ratings agencies could upgrade Turkey soon.
Standard & Poor's and Moody's both rate Turkey two notches below investment grade with a positive outlook, while Fitch lifted the outlook on its BB+ rating -- a single notch below investment grade -- to positive from stable in November.
'The talk of a rating upgrade has been going on for a couple of days now, and the stock exchange seems to be pricing that in,' said an analyst who declined to be named.
The main Istanbul share index rose 0.7 percent to close at 69,311.23 on Thursday.
The yield on the benchmark Aug. 8, 2012 bond traded at 6.87 percent, a historic low, after closing at 6.91 percent on Wednesday.
The benchmark yield has hit all-time lows this week amid expectations the Central Bank will cut interest rates again.
Turkey sold the bond on Wednesday at a yield of 6.25 percent, the Treasury said on Thursday, with the auction five times subscribed.
'Regarding the yield and the demand, clearly it is a good start for the year,' analysts from Oyak Securities in Istanbul wrote in a research note.
The lira closed at 1.5480 against the dollar after closing the previous session at 1.5487.
NEW INDEX LAUNCHED ON BOURSE
Turkey's Istanbul Stock Exchange on Thursday launched an index comprised of 30 listed companies that comply with Sharia banking principles as the country seeks to attract interest in its burgeoning Islamic finance sector.
The Participation Index will include discount retailer BIM, Turk Telekom, the main landline operator and builder Enka Insaat, said Avsar Sungurlu, deputy CEO of Bizim Securities, which is consulting for the index.
Steelmaker Kardemir was among top gainers after announcing on Wednesday it won a government tender for 20,000 tonnes of rail, worth 12.38 million euro. Shares rose 3.9 percent to 0.80 lira.
Among the most-traded shares were sister media companies Dogan Yayin and Hurriyet and their parent Dogan Holding after details of planned Dogan Yayin asset sales emerged on Wednesday.
Shares in Hurriyet extended their rally after rising 13.4 percent on Wednesday, closing 4.27 percent higher at 2.20 lira.
'Hurriyet shares had a serious gain yesterday and they continue to outperform after yesterday's newsflow,' said Metin Esendal, an analyst at Oyak Securities in Istanbul.
Dogan Yayin shares gained 5.42 percent to 2.14 lira.
Dogan Holding rose 1.72 percent to 1.18 lira in heavy trade.
(Writing by Ece Toksabay, Editing by Catherine Evans) Keywords: MARKETS TURKEY/ (ece.toksabay@reuters.com; +90 212 350 7052; Reuters Messaging: ece.toksabay.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The auction of the 30-year, $1 billion Eurobond, the first issue from an emerging market this year, saw high demand at a competitive yield, analysts said, as traders speculated that ratings agencies could upgrade Turkey soon.
Standard & Poor's and Moody's both rate Turkey two notches below investment grade with a positive outlook, while Fitch lifted the outlook on its BB+ rating -- a single notch below investment grade -- to positive from stable in November.
'The talk of a rating upgrade has been going on for a couple of days now, and the stock exchange seems to be pricing that in,' said an analyst who declined to be named.
The main Istanbul share index rose 0.7 percent to close at 69,311.23 on Thursday.
The yield on the benchmark Aug. 8, 2012 bond traded at 6.87 percent, a historic low, after closing at 6.91 percent on Wednesday.
The benchmark yield has hit all-time lows this week amid expectations the Central Bank will cut interest rates again.
Turkey sold the bond on Wednesday at a yield of 6.25 percent, the Treasury said on Thursday, with the auction five times subscribed.
'Regarding the yield and the demand, clearly it is a good start for the year,' analysts from Oyak Securities in Istanbul wrote in a research note.
The lira closed at 1.5480 against the dollar after closing the previous session at 1.5487.
NEW INDEX LAUNCHED ON BOURSE
Turkey's Istanbul Stock Exchange on Thursday launched an index comprised of 30 listed companies that comply with Sharia banking principles as the country seeks to attract interest in its burgeoning Islamic finance sector.
The Participation Index will include discount retailer BIM, Turk Telekom, the main landline operator and builder Enka Insaat, said Avsar Sungurlu, deputy CEO of Bizim Securities, which is consulting for the index.
Steelmaker Kardemir was among top gainers after announcing on Wednesday it won a government tender for 20,000 tonnes of rail, worth 12.38 million euro. Shares rose 3.9 percent to 0.80 lira.
Among the most-traded shares were sister media companies Dogan Yayin and Hurriyet and their parent Dogan Holding after details of planned Dogan Yayin asset sales emerged on Wednesday.
Shares in Hurriyet extended their rally after rising 13.4 percent on Wednesday, closing 4.27 percent higher at 2.20 lira.
'Hurriyet shares had a serious gain yesterday and they continue to outperform after yesterday's newsflow,' said Metin Esendal, an analyst at Oyak Securities in Istanbul.
Dogan Yayin shares gained 5.42 percent to 2.14 lira.
Dogan Holding rose 1.72 percent to 1.18 lira in heavy trade.
(Writing by Ece Toksabay, Editing by Catherine Evans) Keywords: MARKETS TURKEY/ (ece.toksabay@reuters.com; +90 212 350 7052; Reuters Messaging: ece.toksabay.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2011 AFX News
