1. 1 WEEKLY FOREIGN TRANSACTIONS July 7th – July 11th, 2014

2. Equity 2 Foreign investors bought US$126mn (fx-adjusted) Turkish equities last week (July 7th-11th). This is the 1st net foreign buying after 4 weeks, bringing 3Q14 cumulative purchase amount to US$108 and year-to-date cumulative amount to US$1.7bn (≈2012 figures). Foreign equity stock rose to US$62.7bn. BIST-100 index surged 2.7% in US$ terms last week to log the best gain in last 7 weeks as foreign ownership in BIST rose to 63.7%. P/E ratio (current) of BIST-100 closed the week at 13.7, still above its 5-year median.

3. Fixed Income 3 Foreign investors sold US$268mn (fx-adjusted) Turkish fixed income securities last week, registering the 1st weekly sale in last 7 weeks. This brought the year-to-date foreign purchase figure down to US$240mn while 3Q14 amount was cut to US$437mn. Foreign fixed income stock stands at US$54.7bn. Overnight REPO rate hovered right above CBRT’s borrowing rate last week (8.0%) amidst market’s expectation of 50bps policy rate cut. Turkey’s 2-year CDS rate was unchanged last week at 102.4 while 5-year CDS retreated to 176.1.

4. Summary 4 Total foreign outflow from Turkish securities (equity+fixed income+REPO) last week amounted to US$866mn (fx-adjusted), 1st outflow since late May’14. BIST-100 index advanced 2.4% last week despite global profit-taking and closed just below 80k level. Despite last week’s outflow, monthly (last 4 weeks) foreign purchase of Turkish securities still standing tall at US$3.9bn. Foreign stock of Turkish securities advanced to US$130.5bn, 32-week-high, yet still below all-time-high level of SU$166.1bn which was reached in mid May’13.

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