Thursday June 21, 2012
Moody’s upgrade boosts Turkish assets
ISTANBUL: The Turkish lira, bonds and stocks all gained yesterday after credit ratings agency Moody's raised Turkey's sovereign debt rating by one notch to Ba1 from Ba2 and maintained its positive outlook on the country.
Moody's cited a significant improvement in Turkey's public finances and the resulting increased shock-absorption capacity of the government's balance sheet, boosting hopes of a subsequent upgrade to investment grade.
“This is good news for the bond market, especially for the foreign currency debt.
“A further upgrade by Moody's by one notch will put Turkey's external debt in the investment-grade category, which should attract further international interest in Turkey bonds,” said Benoit Anne, head of emerging markets strategy at Societe Generale.
“We expect the resilience of long-end local debt to continue, boosted also by the upgrade news today.”
By 0722 GMT the lira strengthened to 1.7932 against the dollar, from 1.7980 before the upgrade announcement.
The yield on Turkey's benchmark bond fell to 8.92%, the lowest level since the end of February.
Istanbul's main stock index rose 0.9% to 59,843.37 points, outperforming a 0.48% rise in the MSCI emerging markets index. Reuters