TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

" The BIST100 closed the day on a half point loss at 7222, with a turnover of 144.6bn, facing profit-takings after peaking at 7366 level, with the Banks and Conglomerates dragging the BIST downwards, whereas the Energy stocks managed to diverge positively form its peers.
" GUBRF, ALARK and BIMAS were the most bought blue-chip stocks, regarding BIMAS, please recall that during times of inflation, consumers tend to "trade downwards" as our beloved GM Mete Yuksel likes to say, and this habit would most likely shift consumer spending to the more affordable BIMAS stores from its peers. On the bottom end, AKBNK, KRDMD and SAHOL were the most sold stocks.
" Today, we may expect a flat opening at the BIST, however, the possibility of an "inflation-indexed" investment tool is most likely to continue to haunt investors, and perhaps a question a brave sole can ask Mr Simsek or Ms. Erkan at today's JP Morgan investor conference.
" As of yesterday's session close, the TRY is trading slightly weaker, just shy of the 27 level, and but flat against the Euro at 29.60, whereas the DXY receded slightly to 102.40.
" On the Commodity front, Brent is trading slightly higher this morning at USD 85.16, and ounce and gram GOLD prices are trading relatively calms at USD 1937 and TRY 1681, respectively.
" July CPI was at its 1.5 year peak, soaring by 9.49% vs the expected increase of 8.15% on an m/m, and annual inflation peaked at 47.8%, thus resoundingly ending 8 consecutive months of retreat. The increase can be attributable to the recent hike in gasoline prices, causing Transportation costs to be the July cost champion by rising17.75%, followed by Healthcare on the back of the price hikes on medicine causing the sector cost to rise by 13.61%, and Restaurants and Hotel prices rose by 11.92%.
" Speaking regarding the surge in inflation, the Minister of Economics and Finance, Mr. Mehmet Simsek, stated that price stability and disinflationary phase was in progress, and that annual inflation would most likely fall in mid-2024.
" Richmond Fed President, Thomas Barkin, stated yesterday that the greater-than expected easing in inflation in June may be an indication that the US economy can have a "soft-landing," returning to price stability without damaging recession.
AGENDA:
" On the local front, besides the JPM meeting with foreign investors, the REER will be disclosed (Prev. 51.51), whereas the NFP (EST: 200k) from the US will be the key macro news flow as it is one of Fed Chairman Jerome Powell's key rate decision indicators.
BANKING WEEKLY:
" Foreign investors purchased US$178.9mn of equities during the week ending on July 28th. This has been the 8th consecutive week with net inflows summing up to a total of US$1.79bn triggered by rational policy rhetoric of the new economy administration. The foreign share in the BIST free float has inched up to 30% from 29.4% a week earlier. Though it still has a long way to go to what it was three years ago. Improving transparency of the economy administration and reverting to generally accepted macro principles will further support foreign inflows in our view.
" Foreign outflow from the bonds however prevails for the second week in a row. Non-residents sold US$8.7mn of TRY bonds w-w, pulling down the foreign share in bond market to 0.61% from 0.63% a week ago. We believe that foreigners are waiting for the completion of the rate-hiking cycle, to be a net buyer on TRY bonds. Recall that in July MPC meeting, the CBRT raised the rate by just 250 bp to 17.5%. The diminishing steps of rate hikes indicate that the policy rate is unlikely to match the CPI at the peak of the cycle. Annual inflation for July was announced as 48%, while the CBRT sees 58% CPI for 2023 and 33% for 2024. While such limited policy rate moves would normally be insufficient to prevent TRY deterioration or tame the inflation, higher required reserves, quantitative tightening steps and improving credibility of the central bank will be supportive in our view. Given the more realistic inflation expectations set shared by the CBRT, pledges on the continuation of the tightening and on the back of the Governor's impressive Q&A performance we are hopeful on the inflation outlook.
CORPORATE NEWS:
" ISCTR: It was announced that a total of US$109mn loan agreement with a maturity of up to 2 years with 1 year extension option to finance firms and individuals in the earthquake region within the scope of the Türkiye Disaster Response Framework was signed between the Bank and the EBRD.
" KRVGD: It has been announced that the establishment procedures of the company named - MCC for Confectionery Manufacturing with a capital of US$50 thousand have been completed. By forming a company in Egypt for the production of soft candy products and the sales of those products in the MENA market, increasing the market penetration in the related region, speeding up the process for the globalisation of the company and distributing the economic/politic risks are aimed. A total investment of US$30mn is planned in the long term.
" MGROS: In July, a total of 37 new stores opened; 13 Migros, 16 Migros Jet, 6 Macrocenter, 2 Mion.
" SUWEN: It was stated that the company opened 3 new stores abroad (in Bosnia Herzegovina, Turkmenistan and Jordan) and 1 store in the country at Kırklareli 39 Burda AV.
" TURSG: It has been announced that Taha Çakmak has been appointed as the General Manager of The Company.


 TFG Istanbul Menkul Değerler A.Ş.
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