Market Watch (Şeker Yatırım)

Market Watch - Friday, October 6, 2023
Outlook:
The BIST100 Index started Thursday on a positive trend, testing 8,179 at noon with sales following news that the Turkish Armed Forces had launched an operation in Syria. With reactionary purchases at these levels, the Index ended the day at 8,487.98, up 1.86%. While the Industrial Index rose 1.23%, the Banking Index continued its positive divergence, up 3.28%. The expectation that Turkey could increase foreign interest with the continuation of its new economic policies supports the Index, and yet the rise in deposit interest pressures it. As the volatile course is expected to continue in the short term ahead of the 3Q23 financials, we foresee divergences in sectors and companies with positive expectations. On the global front, while bond interest rates have retreated from risky 16-year highs, they are suppressing risk appetite as they remain high. Major stock markets ended Thursday with mixed movements, and this morning the U.S. and German DAX futures are bearish, while Asian Stock Markets in general are bullish. In China, markets remain closed for the holidays. Today, foreign markets will follow employment data to be announced in the USA. Strong data may suppress risk appetite with the expectation that the Fed will continue to raise interest rates, while weak data may support risk appetite. The VIOP-30 Index closed the evening session down 1.33%. Locally, we expect the Benchmark Index to start Friday with a selling trend, with declines in turn presenting buying opportunities. SUPPORT: 8,330 - 8,170 RESISTANCE: 8,488 - 8,563.
Money Market:
The Lira was positive yesterday, gaining 0.02% compared to the USD to close to 27.5629. In addition, the currency depreciated by 0.02% against the basket composed of $0.50 and €0.50. Meanwhile, the local fixed income markets were negative. The ten-year benchmark bond was traded within a tight range of 26.60%-26.64%, ending at the 26.62%, 16 bps above its previous closing.
Sector News:
BRSA Weekly: The decline in Currency protected deposits continues to lose momentum, marking the first quarterly decline in FC deposits since 4Q21. According to weekly BRSA data as of September 29, 2023, the sector's FC deposits fell sharply by USD4.1bn and 2.0% weekly to USD198.9bn.
Thus, after a sharp decline of USD16bn and 7.5% in 2Q23 over 1Q23, FC deposits rose by 1.5% and USD2.9bn in 3Q23. This marks the first quarterly increase since 4Q21. The share of FC deposits in total deposits fell by 270bps QoQ to 40.8% in 3Q23. For state and foreign deposit banks FC deposits rose 3.6% and 0.3% QoQ. For private deposit banks it fell by 2.1% QoQ.
The rate of decline in Currency-protected deposits continues to slow down. The weekly rate of decline in KKM slowed down further, decreasing from 0.1% to 0.04% WoW. The total amount fell slightly by TRY1.3bn to TRY3.30 trillion. This is the lowest weekly decline of the past 6 weeks. Its share in TRY deposits fell by 20bps to 41.9%. The total decrease in the past 6 weeks hit USD104.8bn and 3.1%. In dollar terms, it fell by 1.0% WoW to USD121.1bn and the decrease in the past 5 weeks reached USD6.5bn. The share of KKM deposits in FC deposits rose by 60bps to 60.9%.
Sharp decline in commercial institutions' FC deposits. Individual FC deposits (in $ terms) fell by USD2.1bn and 1.7% on a weekly basis to 122.2bn dollars. Commercial institutions FC deposits (in $ terms) fell relatively sharply by USD1.9bn and 2.6% weekly. Lastly, official and other institutions' FC deposits fell USD125mn and 2.5%.
Decelerated TRY deposit growth WoW. Total TRY deposit growth lost pace to 0.4% from 1.7% WoW in the previous week. Individual deposits rose by TRY46bn and 1.0%, while those of commercial institutions fell by TRY33bn (-1.1%) WoW. Other institutions' TRY deposits fell by 3.2% WoW.
Decelerated TRY loan growth in 3Q23, with a strong recovery in private deposit banks. The growth rate of sector TRY loans eased to 8.6% from 11.3% in 2Q23 due to a sharp slowdown in credit cards and commercial loans. TRY loan growth in private deposit banks, contrary to the sector trend, recovered significantly from 5.8% in 2Q23 and rose to 11.4%, amid solid growth in consumer loans and commercial installment loans. For foreign deposit banks It eased to 10.6% from 12.1% in 2Q23. Among state deposit banks, growth decelerated to a relatively weak 6.9% in 3Q23 from 15.5% in 2Q23.
Slowdown in consumer loan growth QoQ. Consumer loans rose by 4.7% in 3Q23, following the 8.8% rise in 2Q23. The quarterly increase in private deposit banks is quite strong at 9.3% (2Q23: 9.4%). There was a 5.8% rise in foreign deposit banks (2Q23: 10.1%), and a 0.8% fall in 3Q23 at state deposit banks following the 6.1% increase of 2Q23.
A sharp decline in credit card growth QoQ, the first quarterly decline in commercial credit cards since 1Q19. The quarterly growth rate of consumer and commercial credit cards eased considerably from 36.1% and 26.4% in 2Q23 to 22.9% and 4.2% in 3Q23, respectively. For private and foreign deposit banks, commercial credit cards fell 2.8% and 8.4% QoQ after a long break. This marks the first quarterly decline since 1Q19. The growth in state banks slowed down significantly from 44.1% in 2Q23 to 17.8% in 3Q23.
Private deposit banks posted best-in-class growth in commercial installment loans QoQ. The sector's commercial installment loans growth rate visibly decreased from 13.3% in 2Q23 to 4.7% in 3Q23. Private deposit banks stand out with a solid increase of 19.1% in 3Q23, following a 5.1% decline in 2Q23. The growth in state deposit banks slowed down significantly from 24.2% in 2Q23 to 2.0%. For foreign deposit banks, QoQ growth reached 3.0%, slightly above the 2.3% level in 2Q23.
TRY commercial loan rates hit a new record high, again above 3-month TRY deposit rates. On the funding side, the weighted average interest rate on TRY deposits with up to 3M maturity rose by a further 247bps weekly, reaching 45.21%. The weighted average TRY commercial loans rates (excluding overdraft and corporate credit cards) also rose by a strong 382bps weekly to a record high 45.99%. Thus, the spread between them improved to +78bps from -57bps the prior week. Commercial loan rates rose a rock-solid 27.6 points compared to 2Q23, while TRY deposit rates were up a limited 676bps QoQ
Contrary to the sector trend, state deposit banks' FC long position rose WoW to a record high. The sector's FC long position fell slightly by 2% on a weekly basis to USD4,710mn. State deposit banks' FC long position, contrary to the sector trend, rose 5% on a weekly basis to a new record high of 1,858 million dollars. In foreign deposit banks, it fell slightly by 1% weekly to 1,312 million dollars. In private deposit banks, it decreased sharply by 14% on a weekly basis to USDD1,328mn. The sector's FC net general position/regulatory capital ratio fell from 5.7% to 5.6%. On a segmental basis, the ratio is 7.0% and 6.8% in state and foreign deposit banks, and 4.9% for private deposit banks.
Company News:
Sabanci Holding (SAHOL.TI; OP) has bought back 2.000,000 of its own shares (0.098% of its paid-in capital) within a TRY 58.55-59.00/share price range as part of its share buyback program of up to TRY 102mn nominal shares and TRY 3,250mn value (Neutral).


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