Turkish assets fall, bonds in focus

ISTANBUL: Turkish assets eased on Thursday, and intra-day strong performers Afyon Cimento and consumer electronics retailer Bimeks lost much of their early gains as negative sentiment mounted.

The Istanbul share index closed 0.36 percent weaker at 67,959 points, underperforming the MSCI's benchmark emerging equities index, which was down 0.13 percent.

The Treasury's new benchmark bond, maturing on Feb 20, 2013, rose to 8.72 percent, from a close of 8.68 percent on Wednesday. Traders said worries about a possible Greek debt restructuring hit risk appetite.

The lira weakened to 1.5230 from 1.5165 on the interbank market on Wednesday. The currency has weakened since hitting its strongest level in four months last week at 1.5020.

Afyon shares initially rose 4.5 percent to 187 lira after Sabanci cement group Chairman Mehmet Gocmen said the firm is interested in acquiring domestic cement makers and could buy Afyon, but later lost gains to close up just 0.28 percent.

Shares of Migros, a Turkish supermarket chain, declined 18 percent to 25.6 lira after shareholder MH Perakendecilik sold 29.8 million lira nominal shares to foreign investors, lifting the free float to 19 percent from 2 percent.

MH Perakendecilik sold shares at 25 lira each, below the current price, triggering profit-taking after the sale, an analyst said. Migros closed at 31.3 lira on Wednesday.

Consumer electronics retailer Bimeks, making its stock market debut, rose from its base price of 4.5 lira to 4.76 lira, before closing back at 4.53 lira.

Markets closed before a presidential source told Reuters that President Abdullah Gul had approved the nomination of Erdem Basci as Turkey's new central bank governor, replacing Durmus Yilmaz whose term expires on April 18.

The appointment came as little surprise and few analysts expect his successor to change the focus of monetary policy. The central bank is under scrutiny due to its unorthodox policy stance of raising banks' reserve requirement ratios (RRRs) to dampen lending, while keeping interest rates low.