Borsa Istanbul has extended the up-tick rule that it introduced on February 24 for a third day, the authority said on February 26.

As of January 2, Turkey’s capital markets board (SPK/CMB) lifted a short selling ban for the BIST-50 components. The ban was introduced following the catastrophic February 2023 earthquakes that hit the south of the country. It was kept in effect for non-BIST-50 stocks.

10,000

Borsa Istanbul’s benchmark BIST-100 index has been stuck around the 10,000-level in Turkish lira terms for almost a year.

Monetary tightening, launched in Turkey in July 2023, has been hurting the equities market. Lately, demand seen in initial public offerings (IPOs) has been hit. Currently, there are no offerings in the pipeline.

There is also some pressure being felt on the USD/TRY pair. The central bank has been burning through some reserves. However, it is not expected that the authority will lose control or burn through a significant sum.

The nominal devaluation and real lira appreciation policy remains on track, with Turkey’s credit default swaps (CDS) hovering around the 250-level.

Annual routine

Recently, some stress has manifested in global stock markets. Tesla Inc (Nasdaq/TSLA) shares and cryptocurrency markets have reversed gains enjoyed as part of the Trump rally.

In its Outlook Turkey 2025, bne IntelliNews noted: “This year, the New Year rally arrived late, kicking in only at the beginning of the Christmas week.”

“Until the end of February, the positivity may sustain. Then a reverse will arrive, followed by a recovery,” this publication reiterated.

“May is the month that usually runs according to the principle of 'Sell in May, go holiday.' Following a recovery, the summer liquidity dry-up then creates a shake-up in August. It is followed by a recovery that takes place by November, when a shake-up occurs prior to the beginning of the new year rally,” it added.

2025 horizon

When all's said and done, Borsa Istanbul remains in a perfect mess. Given that the government does not allow the lira to appreciate, another negative is that currency gains are missing.

Local investors, who currently dominate the market, have turned to deposits and money market funds with lira deposit rates and interbank money market rates shifting above the 50% policy rate that prevailed in 2024.

With the rate-cutting cycle in progress, 2025 is the year of Turkish government lira bonds. The carry trade is still working out too. And Turkish eurobonds always offer good yields.

Highly manipulated, no foreign interest

It should be noted that Borsa Istanbul is a highly manipulated market. Foreign investors have yet to show real interest in Turkish stocks. Risks will not be overlooked.

Widespread manipulative operations regularly take place. The trading boards are not deep enough and algorithmic trading via well-known foreign brokerage houses rule the market.

Given the market situation, even the top BIST-30 index includes many manipulated stocks. If you are not an insider privy to those circles doing the manipulating, trading stocks that are out of BIST-30 territory is similar to swimming in a pool full of sharks.

Banks in focus

In 2025, Turkish stocks are supposed to come back into the game. The banking stocks, as the first beneficiaries of a rate-cutting cycle, are being watched.

Akbank (AKBNK), a unit of Turkish conglomerate Sabanci Holding (SAHOL), Isbank (ISCTR) and Yapi Kredi Bank (YKBNK), a unit of Turkish conglomerate Koc Holding (KCHOL), are well-managed banks and they are among the components of the BIST-30 index.

The Garanti (GARAN) stock is, meanwhile, not the old GARAN. Its free-float rate fell to 14% after BBVA (Madrid/BBVA) upped its stake to 86% in 2022.

The foreign interest seen in shareholder sales held in December may also suggest that automotive and aviation stocks deserve a look.