TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

BIST sell-off likely to prevail
" The BIST closed a rather volatile trading session, interchanging throughput the day between Red and Green, before finally caution reigned stronger, ending the day on a loss of 0.67% at 7169, and turnover of TRY 1723bn. The global markets were also negative due to mixed financial earnings, as well as lower-than expected PMI manufacturing figures.
" This morning, the markets are also trading lower, primarily due to Fitch's downgrade of the US credit rating from AAA to AA-. MSCI Asia is down 2% this morning.
" On the local side, according to the Ekonomim website, citing a local professor, the CBRT may be getting ready to launch a "Super Bond," with a return greater or at least at pair with inflation rate, with a maturity of 3-6 months, to tackle inflation. We deem this high yield "Super Bond" would cause for local investors to first exit the stock market in favour of a less risky investment tool, as well as strengthening the TRY.
" Thus, amid the negative trading in the Asian and Futures' markets, and speculations of a "Super-Bond," we expect a negative opening.
" The Banks and Conglomerates, as well as the Aviation stocks weighed down on the benchmark, due to the new BRSA regulations aimed at curbing discretionary spending, whereas the losses among the Energy stocks were less severe than their peers. ISCTR managed to diverge positively from its peers, as it still has to release its financials, and guessing from its peers, it too will most likely beat expectations.
" As of yesterday's session close, the TRY is trading a tad weaker against the USD at 29.97, but considerably weaker against the Euro at 29.66, after strengthening to 29.56. The DXY has slid slightly to 102. 06. On the Bonds' side, both the 2yr and 10yr rates rose by 5bps and 18bps to 15.64% and 18.76%, respectively.
" On the Commodity front, Brent has surged to USD 85.55, after the American Petroleum Institute stated that weekly stockpiles had fell by 15.4mn barrels, as well as record demand forecasts by leading brokerage houses for the Black Gold. Ounce and gram GOLD are trading slightly higher this morning at USD 1949 and TRY 1689 respectively.
" Yesterday, Atlanta Fed President, Raphael Bostic stated that he doesn't think a rate hike in September is needed, but more importantly, said that the Fed would keep rates high and probably not cut them at least until the second half of 2024. A period of higher rates is needed, he said, to make sure the rate of inflation slows toward 2%.
" Along with the fall in the global PMI figures, Türkiye's manufacturing index fell to 49.9 in July from 51.5 the previous month, mainly due to inflationary measures.
AGENDA:
" There are no major macro releases expected today, whereas our US colleagues will be following the US ADP employment figures, ahead of Friday's quintessential NFP release. Tomorrow is the big day as July CPI inflation for Turkey will be released. 9.1% is the monthly inflation expectation, which will boost the annual figure to 47% from 38% a month earlier.
CORPORATE NEWS:
" KCHOL - POSITIVE/NEUTRAL - 2Q2023 financial results of the Company came out better than expectations. Net income of TRY20.6bn is 12% above the expectations of TRY18.4bn. The increase in net profit was 22.8% q-q and 33.3% y-y. We expect neutral market reaction as all have disclosed their results already. EBITDA margin improved to 17.9% from 16.1% in the previous quarter and from 17.3% in 2Q22. Combined revenues went up by 83% y-y and TRY159.9 bn of Koç Holding's revenues came from the energy sector, TRY133.8bn from automotive, TRY68.4 bn from finance and TRY 56.2 bn from the durable goods sector. The Holding made a combined investment of US$ 1.6 bn in the same period and the company's investments in the last 5 years have reached US$10 bn dollars.
" ASELS: It is announced that amounting to US$10.8 mn contract covering fire control systems for end use signed with an Asian and a European country. In addition to that it is announced that a contract worth US$11.9 mn signed between the company and Roketsan.
" ASELS: It is announced that the company participated in the capital increase realized by DASAL Aviation and Aselsan's share increased from 40% to 49%.
" ASELS: It is announced that 30% share of SOM was purchased and the share of the company in the partnership increased from 50% to 80%.
" PNSUT: It has been announced that the company will start exporting milk and dairy products to Saudi Arabia.
" PETUN: It has been announced that the company's products are listed as an approved supplier in the Saudi Arabia Moccae ministry system.

 
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