Market Watch (Şeker Yatırım)

The BIST 100 Index started Thursday on a positive trend with limited reaction purchases, then tested above 9,150 levels, but faced difficulty maintaining the trend. The Benchmark Index, which fell below 8,900 due to rising sales towards the end of the day, closed at 8,898.23, down 1.27%, marking the lowest level of the past six months. The Industrial Index lost 0.95% of its value and the Banking Index fell 2.86%. September CPI data announced yesterday rose by 2.97% MoM, and annual inflation decreased to 49.38%. The monthly inflation level, which exceeded expectations, showed that despite tight monetary policy the disinflation process remains far from the target. On the global front, risk appetite decreased due to ongoing tension in the Middle East, and the U.S. and European stock markets closed on a decline. The VIOP30 Index rose by 0.1% in the evening session. While Asian stock markets are following a mixed course this morning, the U.S. and German DAX futures are positive. News flow from the Middle East remains the market focus. The non-agricultural employment and unemployment rate data emerges in the USA today. Locally, we expect the Benchmark Index to start Friday flat, and to continue its weak and fluctuating course throughout the day. SUPPORT: 8,800 - 8,700 RESISTANCE: 9,100 - 9,250.
Money Market:
The Lira was positive yesterday, gaining 0.09% against the USD to close at 34.1794. The currency also appreciated by 0.15% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were negative. The ten-year benchmark bond was traded within a range of 29.31%-29.49%, ending the day at a high of 29.49%, 46 bps above its previous closing.
Headlines:
CPI rises 2.97% mom in September, while annual inflation prints at 49.38%. Rigidity in the underlying trend of monthly inflation, which was above expectations, continues... CPI increased by 2.97% mom in September, while annual inflation fell to 49.38% (previous 51.97%). Market expectations were for a 2.2% mom and 48.27% YoY increase in inflation (Seker Investment expectations were 1.96% mom and 47.85% YoY). The monthly inflation rate, which was above both market and our expectations, shows that the disinflation process is still far from targeted levels despite the tight monetary policy. The average of food, housing, and transportation inflation, which has a weight of 56.5% in the index, rose by 52% YoY. Weighted inflation in core expenditures is still hovering above the headline inflation level. In the same period, monthly inflation in the Special CPI Aggregate B index (core inflation) was realized as 3.22%, while annual inflation was realized as 48.23%. While monthly changes in core inflation hovered above the headline inflation, annual inflation remained below the headline figures due to the base effect. Producer prices, on the other hand, increased by 1.37% mom in September, while the annual change in PPI was realized as 33.09%. When we look at the sub-indices in PPI, annual changes in main industrial groups were realized as a 32.70% increase in intermediate goods, 37.95% increase in durable consumer goods, 44.38% increase in non-durable consumer goods, 11.89% increase in energy and 36.55% increase in capital goods. Since the CBRT removed the rhetoric on additional tightening from the policy statement, we can say that the upside risks to inflation are limited. However, rigidity in the monthly inflation trend postpones the maturity of the interest rate cut process, thereby reducing risk appetite in financial markets. Barring any unforeseen shocks to monthly price developments in the last quarter, we expect year-end inflation to be close to the upper bound of the CBRT's forecast band. We expect price pressures from recent geopolitical developments to be limited. If the tight monetary stance is maintained until the end of the year, we expect the short-term impact on financial markets to be negative, while the medium and long-term impact will be positive.
Sector News:
BRSA Weekly: The sector's FX deposits in ($ terms) are up by USD9.1bn and 4.8% QoQ in 3Q24 (due to private deposit banks). According to weekly BRSA data as of September 27, 2024, the sector's FX deposits fell by USD1.2bn and 0.6% on a weekly basis to USD197.8 billion. Thus, quarterly growth reached USD9.1bn and 4.8% in 3Q24. This follows the sharp USD21.7bn and 10.3% decline in 2Q24. The quarterly growth in private deposit banks is notable at 5.9%, while at 3.6% and 4.5% at state and foreign deposit banks in 3Q24. The share of FX deposits in total deposits is stable at 37.3% on a quarterly basis.
Currency-protected deposits fell below USD45bn in 3Q24 with a record high quarterly outflow rate QoQ. The quarterly outflow rate for KKM is at a record high of 28% and amounts to TRY503 billion. The outflow in 2Q24 was 12.2% and TRY262 billion QoQ. The total amount fell to TRY1.51 trillion from TRY2.01 trillion in 2Q24. Its share in TL deposits fell by 6 pp quarterly to 13.4%. In dollar terms, it also fell by 32.3% quarterly to USD44.6bn. Its share decreased by 10 pp QoQ to 22.6%.

Loan growth losing momentum QoQ. 13W moving average (FX adj.) total lending growth decelerated to 25.7% in 3Q24 vs. 29.6% in 2Q24 on the slowdown in total consumer loan growth. Total consumer loan growth eased by 180 basis points quarterly, falling to 26%. Consumer credit card growth accelerated sharply, rising from 29.4% in 2Q24 to 49.7%, with the sharpest increase being observed in this segment. Growth in commercial credit cards also accelerated sharply, rising from 15.8% in 2Q24 to 34.1% in 3Q24. Growth in installment commercial loans also rose by 17 points to 48% in 3Q24.
Steep slowdown in the quarterly growth rate of TL deposits. The quarterly growth rate of TL deposits eased sharply to 9% in 3Q24 from 18.6% in 2Q24.
Sector FX long position rises 9% QoQ in 3Q24 (due to foreign deposit banks). The sector's FX long position rose by 9% quarterly to USD2,243 million in 3Q24. This follows a steep decline of 38% on a quarterly basis in 2Q24. The FX long position of State and Foreign deposit banks rose by 13% and 29% quarterly, reaching USD1,663 million and USD615 million , respectively in 3Q24. Yet for private deposit banks, it fell sharply by 86% to USD24 million. The sector's FC net general position/regulatory ratio is at 2.4% as of 3Q24. On a segmental basis, this rate is 5.9% and 2.7% in public and foreign deposit banks, and 0.1% in private deposit banks.
Company News:
Aselsan (ASELS.TI; OP) has signed export contracts valued at USD 26.1mn with customers in the Asia and Pacific regions pertaining to the sale of payloads for naval platforms including radar, the friend-or-foe recognition system, electronic warfare suite, remote-controlled weapon system, submarine torpedo countermeasure system, electro-optical system and firing location detection system. The latest contract represents ~0.21% of the company's total backlog (Positive).
We attended IC Enterra's (ENTRA.TI; N/C) Analyst Meeting yesterday (October 02, 2024) in Istanbul. The minutes summary is as follows:
IC Enterra's YEKA Erzin-2 Solar Power Project has become operational. It was stated that the power plant had commenced production gradually by the end of August 2024. Full capacity is planned to be commissioned by the end of the year. The plant's current 20 MW capacity is expected to reach 136 MW by the year-end. In addition, it is envisaged that the YEKA Erzin-2 project will create production in the 20-25% band when it achieves full capacity. It was stated that with the addition of the power plant to the portfolio, 26% of the installed power will consist of solar and 74% of hydroelectric resources.
Hybrid investments will begin in 2025. The Bagistas Hybrid Solar Power Plant (61 MW) investment is expected to start and be completed in 2025. Hybrid energy systems allow energy to be used when needed by storing energy when energy production cannot be made. In this way, a significant rise in productivity can be achieved.
IC Enterra has completed all pre-license processes for 485 MW capacity solar power plant and wind power plant projects. It is anticipated that a total of 1.5 billion kWh of energy will be produced annually with the 430 MW RES and 55 MW SPP projects. The investment is expected to come to the fore in 2027.

IC Enterra's RES move in Italy. A RES project with a capacity of 64.8 MW is being developed by Troia Wind S.r.l., a 51% subsidiary. This project is expected to have a capacity impact of 34% and generate an additional EBITDA of 13-15 million Euro yearly. Plans are in place to start the investment by the end of 2025, and to put the project into operation by the end of 2026. Another project, 100%-subsidiary Eterna Green S.r.l., has applied for connection rights to the Italian Transmission System Operator Terna for the 57.6 MW capacity Serracapriola RES project. The investment is scheduled to commence in 2026 and to become operational in 2027.
IC Enterra aims to reach approximately 1,200 MW in its licensed project portfolio. IC Enterra Renewable Energy, which generates electricity through nine HEPPs with a total installed capacity of 388 MW in Turkey, focuses on the ongoing 136 MWm capacity Hatay Erzin-2 YEKA GES and 61 MWm Bağıştaş hybrid GES projects, the permit acquisition processes of which are ongoing, in addition to its existing power plants, and continues to pursue storage RES and GES investments. Considering these investments, IC Enterra Renewable Energy aims to reach approximately 1,200 MW in its licensed project portfolio in the operation and investment process by the end of 2026.
Isbank (ISCTR.TI; OP) has authorized its management to issue Green/Sustainable debt instruments for up to TRY10bn, subordinated debt instruments for up to TRY10bn and covered debt instruments for up to a nominal value of TRY65bn.
Migros (MGROS.TI; OP) has announced that in September, 20 new stores (9 Migros, 3 Migros Jet, 6 Macrocenter and 2 Mion cosmetic stores) and 1 distribution center were opened by the Company. The total number of stores is 3,550 as of 30 September 2024. The total net sales area reached 2,005 thousand square meters. Recently, Migros' CEO Mr. Özgür TORT has stated that the growth in physical retailing continues and that the store number, currently at 3,500, may reach around 3,650 by the end of the year. Also, Migros' new store opening target for 2024 is around 350 (Slightly Positive).
In accordance with the related announcement dated 14.02.2023, to contribute to the fair price formation of the Company's shares, Turkish Airlines' (THYAO.TI; OP) BoD has decided to launch a share buy-back program. Per the share buy-back program, THYAO shares with a TL 331,000 nominal value were bought back on Oct 03, 2024 within a price range of TL 270.0 - TL 272.0 (weighted average TL 271.0) per share on Borsa Istanbul by the Incorporation. The total nominal value of repurchased shares has reached TL 5,128,044 which represents 0.371597% of the Incorporation's capital, following the transaction. We believe that the share repurchase made within the scope of the program will be supportive and positive impact the Company's shares (Positive).



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