Turkish stocks rose on Friday as investors continued to see Turkey as one of the most attractive emerging markets, while bonds and the lira eased as investors awaited the outcome of a meeting of G20 financial leaders. Shares closed 0.79 percent higher at 71,006 points, outperforming a 0.14 percent dip in the MSCI emerging markets index, and despite another day of big losses for publisher Dogan Yayin.
Analysts said global investors awash with liquidity, and expecting the US Federal Reserve will soon pump more cash into the market to support the US economy, continued to favour Turkey's sound economic fundamentals and earnings prospects.
"Stocks will continue to gain on injections of liquidity. It is very hard to see how that will change. Some countries in the end may not inject quite the levels of liquidity the markets were expecting, but we still see an upside to the index of some 10 percent," said Fazil Zobu, head of research at TEB Investment. Dogan Yayin fell 4.52 percent as investors continued to punish the publisher after a court ordered it to pay 891 million lira ($628 million) in taxes and fines.
Friday's slide in the publisher's shares added to losses of 7 percent the previous day, wiping out gains made just over a week ago when Dogan Yayin confirmed it had received several bids for some of its units from international media companies. The market was waiting to see if G20 finance meetings and central bankers meeting in South Korea on Friday and Saturday would make any headway in how to manage currency imbalances.
The yield on the benchmark April 25, 2012, bond rose to 7.70 percent from 7.68 percent. Turkey forecasts 6.8 percent economic growth this year and high growth and continued political stability at home have pushed Turkish asset prices towards record highs. However, the main driver of gains over the last month has been the expectation of more cheap money flowing into the market should the US Federal Reserve opt for further monetary easing.