ISTANBUL, (Reuters) - Turkish shares rose three percent on Friday, May 25, in a late buying spree as investors bet that the president will approve a key banking reform bill over the weekend, brokers said.
The main Istanbul National-100 index ended 3.02 percent higher at 11,967.96, slashing the week's losses to six percent from a downward correction triggered by the lower than planned sale in the treasury's Tuesday's domestic debt auction.
"At the end of the session I think the ones who think the banking law will be approved were dominant," said Mehmet Ascioglu at Demir Investment.
The banking law, one of the cornerstones of Turkey's promises of reform to the IMF, has been passed by parliament but awaits the ratification of President Ahmet Necdet Sezer, a former lawyer who has refused some laws in the past on legal technicalities.
"If the law is not approved, sales may emerge in bank sector shares next week. Otherwise, there will be no change as it was already priced in," Ascioglu said.
Commercial banks Yapi Kredi Bankasi, up 3.85 percent at 5,400 and Garanti Bankasi, rising 6.06 percent to 7,000, were the most active.
The other key law, enabling the privatization of landline monopoly Turk Telekom, was approved by the president during the week.
Brokers said that the index was likely to remain in the 11,500-13,000 range next week as investors look for hints of progress in the government's IMF-backed reform agenda.
An IMF team is due to visit Turkey on June 1. "Depending on that team's assessment, the next tranche of the IMF loan will be freed," said Tulin Kesikbas at Pamuk Investment.
The market is also watching a treasury debt swap plan. The swap deal as outlined would help banks by giving them foreign exchange-based paper to cover open forex positions and would aid the treasury by extending the maturity of its debt.
Daily turnover fell to 290.2 trillion lira ($260.8 million) from Thursday's 382.86 trillion. Gainers outpaced decliners by 212 to 31 with 56 unchanged of 299 traded shares.
The insurance sector headed the gainers, rising 6.42 percent.
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