Daily Bulletin

Good morning. Global equity markets are starting the first trading day of 2026 on a mixed but broadly optimistic note. Ongoing expectations of rate cuts by the Fed, upward revisions to growth forecasts, generally solid corporate financials, and positive revisions to profitability expectations continue to support equity markets. Sensitivity to geopolitical developments and the macroeconomic outlook, and the resulting volatility, are expected to persist. The BIST 100 Index closed 2025 with a return of close to 15% in TRY terms, marking its seventh consecutive year of gains. However, when assessed on an inflation-adjusted or USD basis, the index declined by 12% and 7%, respectively. In addition, we calculate that BIST 100 underperformed the MSCI Emerging Markets and MSCI World indices by 29% and 22%, respectively. For this reason, it can be argued that investors in Borsa Istanbul have not felt like investors in a “market that has been rising for seven consecutive years.” For 2026, we expect this picture to turn more favorable and anticipate positive performance in BIST across TRY, FX, and inflation-adjusted metrics. Our detailed expectations can be reviewed in our “2026 Outlook” report. On today’s agenda, PMI data will be monitored domestically, in Europe, and in the US. Domestically, CBRT reserves and foreign investor flows will also be in focus. In this context, we note that, according to Borsa Istanbul data, Turkey recorded a year of net foreign inflows for the first time since 2017. Finally, turning to CDS levels, Turkey’s 5-year CDS premiums start the new year at 204. We highlight that the decline in Turkish CDS spreads observed in 2025 was broadly in line with the emerging markets average, while CDS levels have reached their lowest levels since 2018. Once again, we wish all investors a healthy, happy, and peaceful year ahead.