PhotosTurkish bonds weaken, eyes turn to inflation
Turkish bonds and the lira lost ground on Monday as worries about sluggish economic recovery and hefty Treasury borrowing in 2010 weighed on investor mood, but late gains helped the equity market to stage a positive close.
The lira closed weaker on the interbank market at 1.4960 against the dollar from Friday's 1.4920. The yield on the benchmark Aug. 3, 2011, bond closed at 8.74 percent from a previous 8.56 percent.
Both are retreating from a rally in recent months.
'The pace of recovery in economies is lagging far behind that of financial markets and this is triggering a correction movement,' said HSBC ( HBC - news - people ) strategist Fatih Keresteci.
Turkey's economy shrank by 10.5 percent in the first half and the government contraction estimate for 2009 is 6.0 percent, one of the worst rates among emerging markets.
'Turkish financial markets should not be expected to rebound as long as the outlook in overseas markets does not improve. In addition the additional effect of the high borrowing requirement of the Treasury at the beginning of 2010 should not be ignored,' Keresteci said.
Source: forbes.com
Turkish bonds and the lira lost ground on Monday as worries about sluggish economic recovery and hefty Treasury borrowing in 2010 weighed on investor mood, but late gains helped the equity market to stage a positive close.
The lira closed weaker on the interbank market at 1.4960 against the dollar from Friday's 1.4920. The yield on the benchmark Aug. 3, 2011, bond closed at 8.74 percent from a previous 8.56 percent.
Both are retreating from a rally in recent months.
'The pace of recovery in economies is lagging far behind that of financial markets and this is triggering a correction movement,' said HSBC ( HBC - news - people ) strategist Fatih Keresteci.
Turkey's economy shrank by 10.5 percent in the first half and the government contraction estimate for 2009 is 6.0 percent, one of the worst rates among emerging markets.
'Turkish financial markets should not be expected to rebound as long as the outlook in overseas markets does not improve. In addition the additional effect of the high borrowing requirement of the Treasury at the beginning of 2010 should not be ignored,' Keresteci said.
Source: forbes.com
Publication date: 11/3/2009
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