Turkish bank stocks surged for a second day as investors bet on the political opposition winning Sunday’s elections. The Borsa Istanbul Banks Index rose by 6.5% on Tuesday, taking the total gain for this week to 14%. The surge was led by Turkiye Is Bankasi AS, which rose by 18% over the period. The main opposition party, CHP, owns a 28% stake in the bank. Conglomerates, such as Koc Holding AS, also rallied, contributing to a gain of up to 5% for the benchmark BIST 100 Index.
Investors are expecting a win for the opposition candidate in the first round of the election. The candidate has promised to return to orthodox monetary policies and signal a change in central bank management. Gokhan Uskuay, a fund manager at Allbatross Portfoy, said this prospect is boosting banking stocks and holding companies.
Sunday’s presidential and parliamentary elections will be closely contested. Kemal Kilicdaroglu is challenging President Recep Tayyip Erdogan, who has ruled for 20 years. The vote has become a battle over Erdogan’s unorthodox economic ideas and his government’s intervention in markets, which has alienated foreign investors in recent years.
The main opposition CHP’s stake in Isbank was bequeathed by the country’s founder, Mustafa Kemal Ataturk, in his will. The election outcome will determine Turkey’s economic policy and impact its financial markets. Investors are closely watching the elections to assess the country’s future direction.
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