Daily Bulletin

Good morning. Global equity markets remain in wait-and-see mode ahead of the Fed’s interest rate decision, which will be announced at 21:00 local time. In Borsa Istanbul, easing political risk pricing continues to drive the index toward the historic 11,500–11,600 resistance zone. However, as we mentioned yesterday, given the rapid two-day rally, we may observe a loss of momentum here. At the same time, we saw continued capital inflows and foreign purchases yesterday. The five stocks contributing most positively to the index were ASELS, DSTKF, TUPRS, YKBNK and AKBNK, while YKBNK, TCELL, AKBNK, SAHOL and TOASO stood out for their steady inflows in recent sessions. Turkey’s five-year CDS spreads stand at 244 basis points, at their lowest levels in five years. We expect this decline to continue, which would also support the XBANK Banking Index. Looking at banks’ target prices, the four major private banks (GARAN, AKBNK, YKBKN and ISCTR) currently offer an average 12-month upside potential of 23%. However, with further rate cuts from the CBRT and ongoing declines in CDS levels, we could see upward revisions to target prices, which would imply higher potential relative to today’s levels. For this reason, we believe investor interest in banking stocks will continue. We would also note that GARAN and ISCTR are included in Tacirler Investment’s Model Portfolio. On today’s agenda, the most critical item is the Fed. A 25-basis-point rate cut is expected, but a 50-basis-point cut or a decision to hold rates steady — while less likely — also remains on the table. Each of these three scenarios could trigger markedly different market reactions: holding rates steady would likely spark selling, while a 50-basis-point cut would likely drive buying.