Banks Lift Turkish Stocks as Investors Wager on Opposition Win

(Bloomberg) -- Turkish lenders rallied strongly for a second day to lead gains for the country’s benchmark stock index as some investors bet on a possible win for the political opposition in elections to be held Sunday.

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The Borsa Istanbul Banks Index surged as much as 6.5%, taking its advance this week to 14% on Tuesday, the biggest two-day gain since Oct. 17 on a closing basis.

Turkiye Is Bankasi AS led gains for lenders as the bank in which the main opposition party CHP owns a 28% stake soared 18% in the period. Conglomerates also advanced with Koc Holding AS surging almost 15% to contribute most to the benchmark BIST 100 Index’s two-day gain of as much as 5%, along with Isbank.

“Investors’ expectations for a first-round win by the opposition candidate — who promised a return to orthodox monetary policies as well as signaling a change at the central bank management — seem to have increased,” said Gokhan Uskuay, a fund manager at Allbatross Portfoy. “That prospect is boosting especially banking stocks and holding companies.”

Read more on: Why Turkey’s Election Is a Big Test for Erdogan: QuickTake

Turks will cast their votes in closely-contested presidential and parliamentary elections on Sunday, with President Recep Tayyip Erdogan’s 20-year rule being challenged by Kemal Kilicdaroglu.

Erdogan Challenger Vows to Probe Turkey Bourse, Economy Data

The vote has turned into a high-stakes 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 to it by the country’s founder Mustafa Kemal Ataturk in his will.

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