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Turkish assets firm, following global moves

Reuters - Tuesday, September 9

ISTANBUL, Sept 8 - Turkish stocks jumped 3.4 percent on Monday and the lira strengthened, following global moves after the U.S. government took control of mortgage firms Freddie Mac and Fannie Mae.

The main Istanbul stock exchange <.XU100> was up 3.4 percent at 40,449 points at 0820 GMT.

"It's a terrific start to the week. due to the bailout plans of the two mortgage firms and that gave a boost to Turkish markets," said Istanbul's Meksa Invest analyst Burak Urucu.

Shares in fertilizer-to-construction firm Tekfen Holding <TKFEN.IS> outperformed the market, rising 7.5 percent to 8.60 lira after the company said it was selling 50 percent of its construction firm Tekfen Insaat to Azeri state-owned oil firm Socar.

But the outlook was bleaker for energy-to-media giant Dogan Group <DOHOL.IS> and its media group Dogan Yayin <DYHOL.IS> after a sharp exchange of words between the group's CEO Aydin Dogan and Prime Minister Tayyip Erdogan over the media group's reporting on the government. [ID:nL8642345]

Shares in Dogan Group weredown 6.32 percent at 1.63 lira after falling as far as 9 percent. Dogan Yayin shares were down 6 percent at 1.89 lira.

Dogan-owned Petrol Ofisi shares were also 3.32 percent lower at 6 lira, while the group's Hurriyet Gazetecilik <HURGZ.IS> shares fell 5.63 percent to 1.51 lira.

Investors fear that tensions with the government may hurt the group's potential to win upcoming tenders, including electricity grid sell-offs.

"The harsh exchange of words between the group's CEO and the Prime Minister was a surprise for markets. We knew there were problems between these two groups, but this put everything out in the open," said Urucu.

"Dogan has been looking to participate in a number of government-led tenders. Investors fear this may affect their ability to do so," he said.

Ata Invest said it was reducing its rating for Dogan Group and Dogan Yayin to "hold" from "buy."

The yield on the April 14, 2010 benchmark bond <0#TRTSYSUM=IS> fell sharply to 18.67 percent from 19.11 percent on Friday.

Turkey's lira <IYIX=> also strengthened 1.1 percent at 1.2215 against the dollar after firming as far as 1.2180 on improved global sentiment and general dollar weakening due to uncertainty over how the rescue of the two mortgage lenders may affect the U.S. economy.

The Turkish currency closed at 1.2360 on Friday.

The currency lost some 5.6 percent last week when the dollar was strengthening and investor interest in emerging market currencies weakened. (Reporting by Nevzat Davranoglu and Thomas Grove; Editing by Ruth Pitchford)

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