Turkish banking stocks extend loss to 5.9%

Turkish banking stocks extend loss to 5.9%

Title: Turkish Banking Stocks Extend Loss to 5.9%

Turkish banking stocks extended their losses by 5.9% on September 2, 2025, according to market data. The decline follows a period of significant market volatility and economic uncertainty. This latest drop is a continuation of a downward trend that has been observed over the past few months. Analysts attribute the losses to several factors, including the broader economic conditions and geopolitical tensions in the region.

The Turkish economy expanded by 4.8% in the second quarter of 2025, well above market expectations [2]. Despite this growth, the market remains cautious due to ongoing concerns about inflation, interest rate hikes, and the impact of global economic slowdowns. The Turkish stock market, as measured by the BIST 100 index, has shown resilience but continues to face headwinds.

The market valuation of Turkish stocks has been fluctuating. According to recent data, the market cap to revenue ratio has been volatile, ranging from 14.6x to 22.4x over the past year [3]. The valuation metrics suggest that the market is trading at a premium compared to its historical averages, indicating that investors are optimistic about long-term growth prospects. However, the recent losses may signal a correction in the market's overvaluation.

Under the original Buffet Indicator, the stock market of Turkey is expected to return 31.0% a year for the coming years, with a contribution from economic growth in local current prices: 29.4%, Dividend Yield: 1.8%, and valuation reverse to the mean -0.2% [1]. Under the modified model, the expected return changes to 30.4% a year, with a valuation reverse to mean contributing -0.8%.

The Turkish banking sector, which has been a significant contributor to the overall market performance, has faced increased scrutiny due to regulatory changes and the impact of rising interest rates. The sector's performance is closely tied to the broader economic conditions and the health of the financial system.

Investors are advised to closely monitor the economic indicators and geopolitical developments that may impact the Turkish market. The recent losses in banking stocks serve as a reminder of the volatility that can be expected in the market. As the economic outlook remains uncertain, investors should exercise caution and consider their risk tolerance when making investment decisions.

References:
[1] https://www.gurufocus.com/global-market-valuation.php?country=TUR
[2] https://www.facebook.com/DAILYSABAH/posts/latest-turkish-economy-expands-48-in-second-quarter-of-year-above-market-expecta/1200061458816987/
[3] https://simplywall.st/markets/tr