Turkish assets were little changed on Friday, showing little reaction to a record high trade deficit notched in March, with foreign investor interest subdued by the closure of UK markets for a national holiday. The main share index rose 1.2 percent to 69,250.14, outperforming the MSCI index of emerging market stocks.
Among shares Aksu Enerji, a power generator and distributor, dropped 8.9 percent to 5.72 lira. The company said the privatisation administration didn't approve its application for a 3-month extension of a May 2 deadline to sign a contract to take over two hydro power plants from the state. The company was the highest bidder for two state-run hydro power plants with a bid of $56.08 million. The data showed the country's trade deficit surged 91.3 percent year-on-year in March to $9.811 billion, exceeding forecasts.
By 1430 GMT, the lira was little changed at 1.5173 against the dollar, compared to a spot close of 1.5180 on Thursday. The yield on the benchmark February 20, 2013 bond closed at 8.34 percent, slightly below Thursday's close of 8.36 percent. The yield touched a three-month low of 8.16 percent earlier on Thursday before the central bank revised its inflation forecast upwards.
Turkish Treasury announced its borrowing strategy on Friday, saying it projected borrowing of 10.8 billion lira ($7.11 billion) in May against debt redemptions of 14.6 billion lira. The market's focus will now fall on April inflation data due to be released Tuesday.
Turkish bond yields surged after the central bank raised its 2011 inflation forecast by one percentage point to a mid-point of 6.9 percent, partly on account of higher fuel prices. Turkey imports 95 percent of its oil and gas needs. The size of the trade deficit in March, way over a $8.33 billion deficit forecast in a Reuters poll, raised concern over Turkey's growing external deficits.
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