What does the BIST 100 price-to-earnings ratio say?

According to the report by Üzeyir Doğan, the main sector limiting the rise in the index was the banking index. The banking index, which started the week with gains, continued with sell-offs for the remainder of the week. The banking index, which showed signs of stabilization toward the end of the week, appears poised to determine the direction of Borsa Istanbul next week with its performance. News flows regarding inflation accounting attributed to the sector were effective in the decline. If the banking index joins a rebound movement next week, it could lead to a new rise in the BIST 100 index. Although there were fluctuations outside of banking, we can say that many other indices confirmed their upward appetite last week.

The BIST 100 index broke the downward trend that began in October with the opening at the beginning of last week and created a positive outlook by closing above this level throughout the week. While we find the index holding above 7,800 in the short term to be positive, surpassing the 8,080 level above could cause the upward movement to gain momentum. Therefore, this will be the most important level we will monitor during the week. The third-quarter results of companies are now behind us. Looking at the announced results, it is possible to say that it was generally a productive season. While many companies announced financial results stronger than their positive expectations, the price-to-earnings ratio of the BIST 100 fell from around 8.5 in October to around 6.5 due to both the decline in Borsa Istanbul and the impact of the announced profits. In addition to falling multiples, we have also seen a significant decline in CDS premiums in recent weeks. This is a situation that increases the potential in Borsa Istanbul. A price-to-earnings ratio around 6.5 is a level that has been briefly breached downward in the BIST 100 in recent years during the 2008 crisis and the pre-election period this year. In the current situation, we see the possibility of the BIST 100 making a permanent move below these multiple levels once again as low. To put it another way, we believe that the upward potential in Borsa Istanbul is higher.

News Source: 12punto