Market Watch (Şeker Yatırım)

Market Watch - Friday, July 5, 2024

Outlook:

The BIST100 Index started Thursday on a positive trend and closed the day at 10,872.56, up 1.78%. As stocks such as TUPRS, THYAO, KCHOL made the highest contribution to the index by points, the Industrial Index rose 2.03%, while the Banking Index gained 1.03%. The short-term outlook is strengthening due to factors such as Moody's assessment, expected on July 19, and profit-taking may be expected. On the global front, while the U.S. Stock markets were closed yesterday, European bourses followed a positive trend. This morning, U.S. futures and German DAX futures are trading positively, while Asian stock markets in general are trending negatively. In the UK general election the Labor Party has declared victory after 14 years. In France the second round of elections takes place next Sunday. We think that European stock markets and global risk appetite may be positively affected by the lifting of uncertainty once the election outcome becomes clear. Non-agricultural employment data will be followed in the US today. The VIOP30 Index ended the evening session down 0.09%. Locally, we expect the Benchmark Index to start Friday somewhat positively, and to continue its rise throughout the day despite any profit-taking. SUPPORT: 10,800 - 10,600 RESISTANCE: 11,000 - 11,200.
Money Market:
The Lira was negative yesterday, weakening 0.01% against the USD to close at 32.5523. The currency also depreciated by 0.07% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were positive. The ten-year benchmark bond yield fluctuated between a range of 27.08%-27.35%, closing the day at 27.15%, down 20 bps from the previous close.
Headlines:
BRSA May 2024: 7.2% QoQ earnings growth in the first two months of 2Q24: According to monthly BRSA data, sector earnings rebounded by 15.4% on a monthly basis in May, reaching 42.9 billion TL, due to lower capital market transaction losses and the strong rebound in fee and commission income.
In May, the sector's cumulative earnings growth also weakened to 22.8% YoY vs. 31.8% YoY in April. 5M ROAE tightened by 121bps MoM to 26.6%. Cumulative 5-month profit reached TRY233.6bn. The CAR and Tier 1 ratio weakened by 26bps and 5bps MoM to 17% and 13.3%, respectively.
In a quarterly comparison, following the 15.5% QoQ earnings decline in 1Q24, banks delivered 7.2% QoQ earnings growth in the first two months of 2Q24 (April-May) over the first two months of 2Q24 (January-February). On the positive side, NII rose by as much as 32.6% QoQ on CPI linker revenues and slightly improving spreads. NIM widened by 36 basis points compared to 1Q24. The increase in fee and commission income eased to 18.2% QoQ from 19% in 1Q24. On the negative side, a trading loss of 57 billion TL in April-May, vs. 27.7 billion TL in January-February, significantly suppressed profitability. The sharp QoQ decline of 39% in other banking revenues is a negative factor. The limited 4.6% quarterly rise in operating expenses and the sharp 45% easing in loan provisions are positive. The effective tax rate rose to 16% from 1% in January-February. State deposit banks performed the strongest on notable 36.4% QoQ earnings growth. Foreign deposit banks posted a 3.5% earnings decline QoQ. Private deposit banks' earnings fell visibly by 26% QoQ on rather weak core revenues.
*** BRSA Weekly: Record high USD21.7bn and 10.3% QoQ decline in FX deposits in 2Q24. According to the weekly BRSA data as of June 28, 2024, the sector's FX deposits in ($ terms) fell USD2bn and 1.0% weekly to USD188.7bn. The cumulative exit has reached a record-high USD21.7bn and 10.3% QoQ in 2Q24 over 1Q24. The share of FX deposits in total deposits fell by 30bps weekly to 37.3%. State and foreign deposit banks' FX deposits fell by 0.4% and 0.5% WoW, respectively. For private deposit banks it declined by 2% weekly. Individual and commercial institutions' FX deposits fell by 0.4% and 2.5% weekly, respectively, while official institutions' FX deposits rose 2.6% WoW.
Currency protected deposit outflow decelerated. Weekly outflow in KKM eased to 0.9% from 1.7% weekly. The total amount fell by TRY18.3bn to 2.01 trillion TL. Its share in TRY deposits fell by 20bps weekly to 19.5%. In dollar terms, it also fell by 0.9% WoW to USD62 billion. The share of KKM deposits was flat at 32.8%.
Loan growth rate decelerated to 29.6% in 2Q24 from 36.2% in 1Q24 on sharp easing in credit cards. 13W moving average (FX adj.) total lending growth eased sharply to 29.6% in 2Q24 from 36.2% in 1Q24 on a visible slowdown in credit card growth. Total consumer loan growth eased to 24.9% from 32.3% in 1Q24. Consumer and Commercial credit card growth sharply eased to 29.4% and 15.8% from 101.7% and 94.3% in 1Q24, respectively. The commercial installment loan growth rate declined to 30.8 from 60% in 1Q24%.
Slight rise in TRY deposits. TRY deposits rose by 0.2% weekly. Individual deposits rose 0.0%, while those of commercial institutions fell 1.3% weekly. Other institutions' deposits rose sharply by 7.2% weekly.
Steep 3.35pp ease in TRY deposit rates QoQ. On the funding side, the weighted average interest rate on TRY deposits with up to 3M maturities fell by 335bps QoQ to 60.95%. The weighted average TRY commercial loan rates (excluding overdraft and corporate credit cards) and consumer rates fell by 652 and 742bps QoQ to 61.07% and 71.28%. Thus, the spread has weakened to 190bps from 329bps in 1Q24. GPLs' rate, on the other hand, rose 397bps QoQ to 75.68% in 2Q24.
Sector's FX long was flat WoW. The sector's FX long position was flat at USD2,054 million. State deposit banks' FX long position fell by 11% weekly to USD1,472 million. In foreign deposit banks it rose by 2% weekly to USD479 million. Private deposit banks posted a USD164 million FX long position vs. USD7 million in the prior week.
The sector's FC net general position/regulatory ratio fell 10bps to 2.2% weekly. On a segmental basis, this rate is 5.4% and 2.2% for state and foreign deposit banks, and 0.6% for private deposit banks.
Company News:
Coca-Cola Icecek (CCOLA.TI; OP) has announced to increase the paid-in (issued) capital of the Company from TRY 254,370,782 to TRY 2,798,078,602 by increasing the capital of the Company by TRY 2,543,707,820 via bonus issue at the rate of 1000% (10 new shares for each 1 share) to a total of TRY 2,543,707,820, which is to be fully covered from internal Resources. A total of 254,370,782,000 shares with a nominal value of TRY 2,543,707,820 to be issued at 1 Kurus each as bonus shares, and will be distributed to the shareholders.
Migros (MGROS.TI; OP) has announced opening 32 new stores (20 Migros, 9 Migros Jet, 2 Macrocenter and 1 Mion cosmetic store) in June 2024. The total store number is 3,490 as of 30 June 2024. The total net sales area reached 1,980 thousand square meters (Neutral).
 


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