CBRT weekly data (TFG Istanbul Menkul Değerler )

For the week ending on July 7th
During the week ending on July 7th, foreign investors purchased US$231.4mn of equities. This has been the fifth consecutive week with net inflows summing up to a total of US$1.33bn triggered by rational policies pledge of Simsek. Despite further rate hike signals from the CBRT, non-residents also purchased US$57mn of TRY bonds in the week of July 7th, the highest weekly amount in the last 25 weeks. Interest of foreign investors may further increase following the completion of the hiking cycle in the coming months. We are envisaging a further 5pp rate hike on top of the existing 15% in the next meeting, which cannot be deemed sufficient given 38% annual inflation for June and 31% CPI expectation for the next 12 months from market participants survey. Gradual rate hikes to 30% is likely until 4Q23 in our view. While TRY benchmark yield at 14.7% may not look sufficient to satisfy carry trade appetites of non-residents, recent momentum to the south in CDS premiums of Turkey, is supportive of Eurobonds.
While foreign investors have divested US$276mn out of their equity holdings ytd, the foreign share in the BIST free float has experienced a revival in the last couple of weeks. It has rebounded from its lowest level of 27.4% in June to climb up to 29.4% as of today, while being half the level of where it was three years earlier.
Banking Sector Balance Sheet Evolution
FX Deposits

As of the week ending on July 7th, the FX deposits held by individuals remained almost stable at US$93bn. Those of corporates inched up to US$59.9bn from US$59.7bn in the same week. Meanwhile the size of FX-protected deposits kept increasing and reached TRY2.85 trillion. As a result, share of FX protected deposits in TRY deposits hit to 43% at end-June from 29% at the beginning of 2023. As the CBRT provided additional sweeteners for core TRY deposits, we are expecting an increase in TRY time deposit yields that may trigger a switch from FX protected TRY accounts in the weeks to follow.
We have seen the trough for negative core TRY spreads
During the week ending on July 07th, the marginal commercial loan rates went up by 6.8bp to 24.5% (17.6% in the previous week) thanks to 650bp rate hike and a working transmission mechanism on loan yields. Meanwhile, the average 3-month TRY time deposit rates went down to 37.8% from unprecedented heights of a two-decade pinnacle of 40.72% two weeks earlier. Notably, the negative marginal TRY core spreads, which has a significant impact on banks' profitability, continued to improve in the last two weeks and reached -13.4% as of week ending on July 07th. The negative TRY spreads are expected to continue their recovery in 3Q23 onwards as the new economy administration gradually implements more rational monetary policies and the CBRT continues with the hiking cycle.
 
 TFG Istanbul Menkul Değerler A.Ş.
  www.tfgistanbul.com/arastirma-raporlar
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 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.