Market Watch (Şeker Yatırım)

Market Watch - Tuesday, October 10, 2023
Outlook:
The BIST100 Index started Monday on a negative trend, closing the day at 8,193.44, down 3.21%. The Industrial Index decreased by 3.22%, and the Banking Index lost 3.17%. Rising geopolitical risk due to the situation in Israel have caused fluctuations in commodity and stock markets, especially in oil prices, and was also effective in profit sales in the domestic market. Domestic news that the SWAP channel will not be opened to foreigners in the short term contributed to mounting sales pressure. While risk appetite is recovering this morning, commodity prices are settling and positive pricing is observed in the stock markets. We expect geopolitical developments to impact pricing at the BIST, and both domestic and international risk appetite in the short term. Yet as we approach the results season declines will be used as buying opportunities and stock-based movements will gain weight. On the global front, risk appetite is recovering slightly this morning. The U.S. futures, German DAX futures, and Asian Stock Markets in general are bullish. Domestic industrial production and labor market statistics will be announced today. The market expectation is for industrial production to rise by 0.4% MoM and 3.4% YoY. We expect an increase of 0.6% MoM, and a rise of 3.5% YoY for industrial production, accompanied by leading indicators. We continue to expect a gradual increase in the unemployment rate in the last quarter, along with tightening liquidity conditions and slowing growth data. The VIOP-30 index completed the evening session up 0.17%. Locally, we expect the Benchmark Index to start Tuesday with reactionary purchases. Yet any such intraday purchases will ultimately be viewed as a selling opportunity sustaining the fluctuating and weak course of trading. SUPPORT: 8,080 - 7,950 RESISTANCE: 8,270 - 8,367.
Money Market:
The Lira was negative yesterday, weakening 0.30% compared to the USD to close to 27.7064. In addition, the currency depreciated by 0.03% 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 range of 26.84%-27.15%, ending at the 27.00%, 36 bps above its previous closing.
Headlines:
Industrial production and labor market statistics will be released today. Market expectations are for industrial production to increase by 0.4% mom and 3.4% yoy. As Seker Invest, we expect a 0.6% mom and 3.5% yoy increase in industrial production in line with leading indicators. We continue to expect a gradual increase in the unemployment rate in the last quarter due to tightening liquidity conditions and slowing growth data.
Company News:
For Garanti BBVA (GARAN.TI; OP) our 3Q23 net income estimate is TRY18,517mn (+0.3% QoQ, +6% YoY) with a quarterly ROAE of 43%. We model TRY loan growth easing to 11% from 16% in 2Q23, a continuing decline in FC loans, low single-digit growth in TRY deposits, and a slight drop in FC deposits. We foresee an increase in fee and commission income at a level similar to 2Q23.
Trading gain and ECL are expected to drop substantially QoQ. We expect the record high trading gain of TRY13.2bn in 2Q23 to normalize and decline to TRY6.8bn in 3Q23 in the absence of sharp lira depreciation.
For swaps funding, we model a loss of TRY600mn due to increasing volumes. Core NIM is set to weaken by c.100bps on a quarterly basis, in parallel to the narrowing loan-deposit spreads. The CPI linker contribution should soar by 90% QoQ as the bank is set to use 75% in valuing its CPI linker portfolio, vs. 35% in 2Q23.
On the asset quality side, we expect the cumulative CoR (adjusted for the currency effect, net) to hit 80bps, in line with the budget expectation. We predict a 20% increase in OPEX on a quarterly basis. Lastly, strong subsidiary income of TRY3.2bn should boost profitability (Neutral).
3Q23 earnings announcement date: October, 30.
For Yapi Kredi Bank (YKBNK.TI; OP) our 3Q23 net income estimate is TRY17,735mn (+55% QoQ, +10% YoY) with a quarterly ROAE of 57%. The main positive of the quarter is the substantially strong rebound in net interest income (QoQ: 205% increase), as the bank revised the rate used in valuing CPI-linked papers to 60% in 3Q23 from 40% in 2Q23.
Yet we expect the trading gain to normalize and plunge to TRY3.5bn in 3Q23 vs a record high TRY13.9bn in 2Q23. Other highlights of the quarter include a slight recovery in TRY loan growth (+12%), a modest ease in fee and commission income growth (+25%), strong growth in demand deposits despite a rather weak mid-single digit rise in TRY deposits, and elevated OPEX due to higher personnel expenses.
Normalized NIM should remain flattish QoQ. On the swap funding side, we model a loss of approximately TRY500mn in 3Q23, as opposed to TRY1.6bn revenue in 2Q23. We expect the blended loan-deposit spread to improve by 30-40 basis QoQ, in parallel to the 130bps recovery on the TRY side.
On the asset quality side, we model the CoR (including the currency impact) to remain constant at (net) 32bps QoQ, with the support of strong collections. Lastly, OPEX is expected to rise by 16% QoQ in parallel with the wage increases (Positive).




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  Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.