Market Watch (Şeker Yatırım)

Market Watch - Thursday, June 6, 2024

Outlook:
The BIST100 Index started Wednesday on a positive trend, closing at 10,350.96, down 0.13%. The Industrial Index lost 0.77% and the Banking Index fell 0.30%. Newsflow regarding the taxation of financial activities, including the stock market, caused fluctuations at the BIST. Yesterday, the market recovered with announcements that the study would include a limited transaction tax. We expect this hot agenda item to continue impacting the BIST until clarified. On the global front, risk appetite is attempting a recovery. Yesterday, while the U.S. Stock Markets closed with increases, European Stock Markets were on the decline. This morning, U.S. futures and German DAX futures are flat, while Asian Stock Markets are positive, except for China. We expect global risk appetite to continue finding direction from incoming data and statements from Fed members. The European Central Bank meeting will be followed today. The ECB is expected to be the first major central bank to start reducing interest rates, by 25bps. The VIOP30 Index ended the evening session up 0.15%. Locally, we expect the Benchmark Index to start Thursday with limited reactionary purchases and follow a fluctuating course thereafter. SUPPORT: 10,200 - 10,000 RESISTANCE: 10,500 - 10,750.
Money Market:
The Lira was positive yesterday, gaining 0.81% against the USD to close at 32.3144. The currency also appreciated by 0.89% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were negative. The ten-year benchmark bond yield fluctuated between a range of 27.51%-27.88%, closing the day at 27.70%, up 7 bps from the previous close.
Company News:
Sabanci Holding (SAHOL.TI; OP) has booked a TRY 5,366mn consolidated loss in 1Q24, according to inflation accounting provisions (IAS-29).
While the industrial and building materials segments supported profitability, business lines in the energy, financial services, digital and other segments, especially banking, were effective in recording consolidated losses. Banking and financial services segments recorded high monetary losses due to an elevated monetary asset position.
Sabanci Holding printed TRY 171,767mn of revenues (including the financial sector) in 1Q24.
The Holding's solo net cash position rose to TRY 14.4bn doubling from TRY 7bn at the end of 2023 with the impact of the Exsa merger and dividend inflows. Net Debt/EBITDA was 0.9x, well below the Holding's midterm target of a maximum 2.0x
In line with the Holding's 1Q24 financial results, we raise our 12-month target price for SAHOL from TRY 138.27/share to TRY 146.55/share. Our target price has 53% upside potential compared to the stock's closing price on June 5, 2024. We maintain our OUTPERFORM recommendation.
According to inflation accounting provisions (IAS-29), Turk Telekom (TTKOM.TI; OP) printed a net profit of TRY 1,043mn in in 1Q24. (1Q23: TRY 1,239mn, 16% decrease YoY). Operational profitability is strengthened thanks to cost control. Meanwhile, TRY 1,044mn of net investment activity income and a TRY 7,679mn monetary gain supported net profit, and TRY 5,995mn of net financial expenses and TRY 2,055mn tax expenses suppressed it.
The company booked a net sales revenue of TRY 28,024mn adjusted for the IAS-29 effect. Thanks to successful price adjustments revenues rose by 6% YoY. Total subscribers decreased to 52.8mn with the loss of 188k. ARPU has increased 16% in mobile blended and 5% in the broadband segment, yearly.
EBITDA came in at TRY 10,265mn, up 23% YoY, including the effect of IAS-29. The EBITDA margin was 36.6% in 1Q24 (1Q23: 31.6%).
Net debt remained flat... At the end of 2024/03, the company's net debt position remained at TRY 51.1bn. The net debt/EBITDA ratio was 1.48x.
Dividend: The company has announced that there will be no dividend payment or bonus issue.



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