BIST100’s 2024 gains of 34%, forecast record level growth in 2025: Investment reports

Türkiye’s stock exchange market, Borsa Istanbul (BIST), shows positive signals toward 2025 following expectations of the Central Bank of the Republic of Türkiye (CBRT) to begin an interest cut cycle, sustain disinflation, and lift bans on short-selling instruments, according to reports from Turkish investment companies.

Turkish investment companies Info Yatirim and Gedik Yatirim released their 2025 Strategy Reports, evaluating forecasts on Türkiye’s 2025 economic outlook and financial trends this week. According to the reports, CBRT is expected to enter a policy interest cut cycle starting in December 2024, aligning with declining inflation. Meanwhile, both reports highlight BIST100’s performance in 2024, forecasting continued growth to record levels in 2025.

On Tuesday, the BIST100 Index, which represents the top 100 stocks by market value and trading volume, closed at 10,011 points, marking an annual gain of 34%.

‘Lifted ban on short-selling may create catalyzing effect on BIST100′

Info Yatirim’s report forecasts Türkiye’s growth rate at around 2.9% this year, rising to 3% in 2025. The year-end inflation expectation is set at 45%, with a projection of 28% for 2025. Furthermore, the report suggests that credit rating agencies are expected to continue upgrading Türkiye’s ratings.

Key assessments from the report include:

• While the BIST100 had a strong start to the year, risk appetite has significantly declined in recent months. The banking and holding sectors have accelerated the upward movement of the index, especially as foreign investors focus on familiar areas. The banking sector, the heaviest-weighted sector in the index, stood out during this period.
• An increase in policy rates in the second half of 2024 prompted investors to shift to less risky instruments, particularly money market funds, leading to accelerated exits from risky assets.

• Interest rates are projected to decrease by 250 basis points to 47.5% by the end of 2024, with a 500 basis point difference between interest and inflation rates anticipated in the first half of 2025, as the CBRT is likely to sustain its inflation-focused approach in its monetary policy.
• Expectations for the opening of swap channels, lifting the ban on short-selling in the BIST50, and a decrease in CDS premiums are seen as potential catalysts for the BIST. Also, the interest rate cut cycle could drive foreign investors benefiting from high yields to shift towards riskier assets.

‘Stock exchange may profit more than interest yields’

Another investment firm, Gedik Yatirim, highlighted CBRT’s dovish message to initiate an interest rate cut cycle. The report noted a significant improvement in CBRT’s net reserves, excluding swaps, rising from $65.5 billion in March 2024 to approximately $113 billion, creating an important buffer against potential depreciation of the Turkish lira.

Key assessments from the report include:

• Factors such as the current account deficit dropping below 1.0% of GDP and the appeal of carry-trade transactions point to the continued short-term appreciation of the Turkish lira. Alongside real appreciation of the lira, gradual improvements in service inflation are expected to support a continued decline in consumer price inflation in the coming months.
• Based on CBRT’s March projection of 38% consumer price inflation, a rate cut of 750–800 basis points could be implemented by April 2025.
• The current fair value of the BIST100 is estimated at 13,037, with a growth potential of 29% for 2025. However, with upward momentum in profitability cycles, much higher levels are deemed possible.
• The banking, iron-steel, food retail, and telecommunications sectors are projected to lead in real profit performance in 2025.
• As visibility into 2026 improves, equities may achieve significant gains and have the potential to yield returns above interest rates.