TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• Despite a brief rebound and trading in the positive territory, the BIST dampened hopes of a rebound by closing yesterday on a loss of 2.35%, thus below the 5k level at 4977, and turnover of TRY 89.1bn, despite the positive divergence of the Banks ahead of their 4q22 results, that kicked-off yesterday with AKBNK’s results. Due to the reciprocal travel warnings from Turkey and Europe, the Transportations stocks continued to get hammered by investors, falling another 4.58% yesterday.
• Thus, taking a closer look now, ISCTR-thanks to ISGYO’s stellar performance, topped the BIST30 standings, and was followed by DOHOL and GARAN, whereas GUBRF, VESTL and THYAO found themselves on the wrong side of the spectrum.
• Today, we may see a rebound in the BIST, but continue to warn our readers on the on-going volatility.
• As of yesterday’s close, the TRY is trading flat against the USD at 18.81, and also calm against the Euro at 20.44, but weakening considering yesterday’s level of around 20.40, and the DXY is also relatively unchanged at 102.10. Both the 2yr and 10yr bond yields rose by 8bps to 10.53% and 10.66%, respectively. The CDS rates fell by 10pts yesterday to 551.
• On the commodity front, Brent is trading a tad higher at USD 85.46, and ounce and gram GOLD are trading slightly lower at USD 1926 and TRY 1165, respectively, ahead of tonight’s FOMC meeting.
• Turkey Presidential Spokesman, İbrahim Kalin stated that Turkey would not accept any preconditions for F-16 deal with the U.S., and that Turkey won’t budge if US demands Turkey’s ratification for Nordic countries’ NATO bids as a condition for F-16 deal.
4Q22 FINANCIAL RESULTS:
• AKBNK: Akbank posted TRY21.8bn net profit in its 4Q22 financials that is in line with TFG Istanbul estimate of TRY21.7bn and 7% above the consensus mean of TRY20.5mn. The monthly BRSA data was indicative of 5% earnings beat for private banks, so this higher than consensus bottom line should be largely priced in.
• GARAN: Garanti Bank reported TRY19.9bn net profit in its 4Q22 financials that is in line with market consensus of TRY19.1bn and a tad lower than TFG Istanbul Estimate of TRY21.2bn. We envisage neutral market reaction.
• OTKAR: Operationally weak. While bottomline is 15% above expectations the EBITDA came in 13% lower than consensus. EBITDA margin is just 14% vs 19% consensus. The company disclosed a TRY639mn net profit of TRY644mn EBITDA and TRY4481mn sales in its 4Q22 financials.

NEWS FLOW:
• Turkey Trade Balance deficit widened to USD 9.70bn, better than the USD -10.40bn estimate, but greater than last month’s USD 8.77bn. For 2022, the Trade Deficit peaked at its historic level at USD 110.2bn, an increase of 138% y/y
• Foreign Tourist Arrivals rose by 26.8% in December, vs. 44.6% last month.
• ENKAI: Korea's Korea Electric Power Corporation (KEPCO) said Tuesday it has submitted a preliminary proposal to Turkey to take part in a project to build four nuclear power plants and presented the proposal regarding the construction of four reactors capable of providing 1,400 megawatts of electricity in the northern part of the country, according to the company. The two sides have been in talks about the project, which is forecast to be worth about 40 trillion won ($32.55 billion), and the Turkish government in December last year asked KEPCO to submit a proposal. Please note that KEPCO and ENKAI have a joint venture in the construction of nuclear power plants in Turkey.
• SUWEN: Disclosed that the company plans to open 7 new stores in Bosnia Hercegovina between 2023-27, and that the CMB has approved the company’s application to increase its registered capital to TRY 300mn from the current TRY 100mn.
AGENDA:
• On the local front, the PMI will be release today, whereas on the international front, the most compelling data disclosure will be the FOMC interest rate policy (Est. +0.25%), as well as the ADP, PMI, Construction Spending, and ISM and JOLTS Job Openings.

 TFG Istanbul Menkul Değerler A.Ş.
  www.tfgistanbul.com/arastirma-raporlar
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