Turkish Islamic lender Bank Asya shares bounce back after plunging to half in three days

ISTANBUL – Reuters

The government is at odds with Gülen-affiliated lender Bank Asya. REUTERS Photo

Islamic lender Bank Asya’s shares have bounced back from record lows after three straight days of losses, as investors wanting to reduce costs rushed to buy the shares of the lender, which has been at the center of a political feud.

Bank Asya shares’ trading surged nearly 11 percent to 0.71 Turkish Liras ($0.32) after sliding 11 percent at the opening.

The lender’s shares have halved in value since the start of this week, when they resumed trading after more than a month’s suspension over uncertainty about the bank’s future.

A banking sector analyst said some investors seeking to benefit from record low levels and reduce average buying costs rushed to buy shares, despite not having any new reports that could trigger a steep movement.

A portfolio manager said he does not expect the shares to reach their highest price after being traded at their lowest price for three days.

“Investors price the political risk that accumulated from when the trading was sharply suspended. Therefore, I think the prices will fluctuate between their highest and lowest prices until a new balance is attained,” he said.

On Sept. 16, Turkish President Recep Tayyip Erdoğan said the banking watchdog BDDK should “take steps” against Bank Asya if necessary, but did not specify what that might involve.

A day later, the bank said that it was raising its paid-in capital by 25 percent to 1.125 billion liras ($509 million) with cash from shareholders.