Market Watch (Şeker Yatırım)

Market Watch - Tuesday, January 16, 2024
Outlook:
The BIST100 Index started Monday on a positive trend, maintained its positive stance despite intraday fluctuations, and closed at 8,044.02, up 0.72%. While the Industrial Index rose 1.10% the Banking Index lost 1.48%. As the Banking Index has gained over 20% in value since the start of the year, we find it normal and healthy to observe profit realization. However, as long as there is a decline in CDS, rational policies continue to be implemented with determination, and foreign investor interest prevails, we expect sharp withdrawals to present buying opportunities. Uncertainty over inflation accounting and concerns over a decrease in domestic demand will continue to pressure industrial stocks. Across the BIST the high return potential of alternative income instruments and the rise in stock loan interest rates limit investor interest. However, peak levels in deposit interest rates and mounting foreign interest lead us to expect sharp withdrawals in the medium term to offer buying opportunities. Risk appetite in global markets followed a mixed course at the start of the week. While U.S. and Asian Stock Markets generally ended the day with increases, European Stock Markets were on the decline. This morning, U.S. futures, German DAX futures, and Asian Stock Markets in general are on a downtrend. Locally, we expect the Benchmark Index to start Tuesday positively and maintain the uptrend. SUPPORT: 7,990 - 7,895 RESISTANCE: 8,095 - 8,150.
Money Market:
The Lira was negative yesterday, weakening 0.06% compared to the USD to close to 30.0997. In addition, the currency depreciated by 0.04% 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 26.90%-27.22%, ending at the 27.07%, 26 bps above its previous closing.
Headlines:
*** In December, the budget and primary balance posted a deficit of 842.5 and 800.2 billion TL, respectively. While the 2023 budget deficit was 1.38 trillion Turkish liras, the rise in capital transfers is quite remarkable: According to the December central government budget data released by the Ministry of Treasury and Finance, budget revenues and budget expenditures were realized as 550 billion TRY and 1,393 billion TRY, respectively. In the same period, primary budget expenditures were realized as 1,350 billion TRY. Accordingly, the budget deficit was realized as 842.5 billion TRY, while the primary balance posted a deficit of 800.2 billion TRY. While no transfer was made to BOTAS in December, a total of 74 billion TRY was transferred in 2023. The main driver of the budget deficit in December was capital expenditures and transfers. The TL 134 billion in real estate capital production expenditures in capital expenditures is well above the average TL 25 billion expenditure throughout the year. In addition, the transfer of 622.8 billion TRY in the "capital transfers to other unclassified institutions, enterprises and households" item under capital transfers is quite remarkable. The general trend of this item is 16 billion TL on a monthly average. The one-time increase in infrastructure investments, capital maintenance and repair and unclassified expenditures in the year-end accounts triggered the budget deficit. Although the realization was lower than the revised MTP budget deficit forecast, there was a temporary deviation from the 10-year average fiscal discipline anchor in the aftermath of the earthquake.
Budget expenditures increased by 271.2% on average compared to the same period of the previous year. The highest proportional increases were recorded in capital transfers (3.655%) and current transfers (167.4%), while the highest increases were recorded in capital transfers (622 billion TL) and current transfers (195 billion TL). The year-end closures were quite high due to the share allocated to infrastructure investments, households and capital expenditures in the aftermath of natural disasters. The average annual increase in budget revenues was 117.4%. The highest increases were recorded in non-tax revenues (173%) and domestic VAT (225%). SCT and non-tax revenues made the highest contribution to budget revenues (64 billion and 59 billion TRY, respectively). For our detailed analysis, please click the link;
Sector News:
*** The BRSA has announced that banks, financial leasing, factoring, and asset management companies will switch to inflation accounting as of January 1, 2025. We model that after the transition to inflation accounting, the average ROAE of the banks we follow should reach 10-15%, vs. the current c.30% level.
Company News:
For Yapi Kredi Bank (YKBNK.TI; OP) our 4Q23 net income estimate is TRY15,600mn (-37% QoQ, -11% YoY) with a quarterly ROAE of 42%. The main negative highlight of the quarter was the sharp narrowing in adjusted margins due to the steep rise in swap funding costs and lower CPI linker revenues.
We foresee a trading loss of TRY4bn due to record high swap funding costs, which will significantly dent profitability. The bank posted a TRY5.7bn trading gain in 3Q23.
The recovery in TRY loan growth (+16% QoQ), decelerated fee and commission income growth (+22% QoQ), the strong growth in demand deposits despite the relatively low 10% growth in TRY deposits, and steep rise in OPEX due to personnel expenses are other highlights of the quarter.
We model a 20% QoQ decline in CPI linker revenues as the bank revised the rate used in valuing them from 60% in 3Q23 to 62% in 4Q23. On the swap funding side, the bank should post an all-time-high TRY8bn loss due to higher volumes, vs. a TRY415mn loss in 3Q23. NIM (adjusted) should tighten sharply QoQ, yet on a cumulative basis should reach a level close to the budgeted 5%.
On the asset quality side, we model the cumulative CoR (including the currency impact, net) reaching 25bps in YE23, with the support of strong collections. OPEX is expected to rise by 40% QoQ in parallel with wage increases. Lastly, we expect an effective tax rate of 4% (Negative).
4Q23 financials announcement date: February, 2.
December 2023 Foreign activity at Borsa Istanbul: In December 2023 foreign investors were net buyers of Turkish equities at Borsa Istanbul to the tune of USD 565.2mn. Among the top-five most bought stocks: Akbank (AKBNK.TI; OP) on USD 107.5mn, was followed by Turkish Airlines (THYAO.TI; OP), Tupras (TUPRS.TI; OP), Yapi Kredi (YKBNK.TI; OP) and Bim (BIMAS.TI; OP). Meanwhile, the top-five most sold stocks were: Sasa Polyester (SASA.TI; N/C) on USD 86.6mn, being the most active, followed by Turk Traktor (TTRAK.TI; N/C), Sisecam (SISE.TI; OP), Turkcell (TCELL.TI; OP) and Alfa Solar (ALFAS.TI; N/C).
Isbank (ISCTR.TI; OP) has applied to the Capital Markets Board to increase its paid-in capital by TRY15bn to TRY25bn, which is the registered capital ceiling, and to cover the entire increase from extraordinary reserves as bonus shares.
Sisecam (SISE.TI; OP) has announced Sisecam Investment B.V.'s purchase of a 3% stake in ICRON on January 15, 2024 for USD 3mn in cash. In addition, ICRON's capital will be increased USD 5mn with the sole participation of Sisecam Investment B.V.. Following the capital increase, Sisecam Investment B.V.'s participation in ICRON will reach 15.66%. The contract also includes a purchase option right allowing the total stake in ICRON to be increased up to 49% in the future.
Sisecam (SISE.TI; OP) at the January 15, 2024 BoD meeting announced the decision to invest in 175K ton/year heavy soda ash production capacity at the Mersin Soda Ash Plant. Upon completion of this capacity increase in 2026, the Company's installed soda ash production capacity in Turkey is set to reach 1.7mn tons/year, at a total expected investment cost of c.USD 125.3mn, including working capital.



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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.