1- EQUITY: In February 6-10 foreigners were net buyers of another hefty US$307 mn after buying US$366 mn two weeks ago. In January, foreigners were net buyers of US$474 mn and US$72 mn in December.
2- BONDS: The CBT data once again showed that foreign investors were net sellers of US$1,444 mn in that week and benchmark bond yield increased from 9.2% to around 9.5%.
3- FX MARKET: TL depreciated by 0.7% last week with foreign capital outflows. We still think that cross-currency deals, options, structured products, repo transactions, custody definition problems and switches from fixed income to money market by foreigners complicate to form a relationship between the foreign flows & currency. Meanwhile, since the beginning of the year we observe that locals bought FX by around US$5 bn.
4- FX RESERVES: CBT's gross FX reserves recovered further from US$77.0 bn to US$77.4 bn (excluding gold worth of US$11.1 bn) as of February 10.
TO SUM: On a 52-week rolling basis, net foreign inflows in the equity market increased further to +US$0.56 bn last week from +US$0.07 bn two weeks ago (its peak was +US$2.6 bn in May 2011), while 52-week rolling net foreign inflows in the bond market declined from US$10.8 bn to US$8.8 bn (peak was US$18.5 bn in end-April 2011).