TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• The BIST traded around 1% higher for most of the session yesterday, until the disclosure of the lower-than-expected U.S. CPI figures sparked a buying frenzy, elevating the gauge 2.43% higher to a new record closing of 4467, and turnover of TRY 105.5bn, with the BIST peaking just 2pts shy of the 4500 level.
• The Banks and Industrials guided the BIST100 higher, rising by 3.82% and 2.06% higher, and the rise in GOLD prices due to expectations of a less aggressive rate-hike policy from the Fed, was the main cause in the rise in the Mining stocks.
• EREGL, TTKOM and EKGYO were the most bought BIST30 stocks, whereas VESTL’s poor quarterly results caused it to be benched in the buying festivities, alongside PGSUS and GUBRF. On the BIST100 side, speculations of a VAT discount on new cars as well as robust 3Q numbers were behind DOAS’s limit-up closing.
• Today, we expect the party mood after yesterday’s CPI reading from the U.S. to continue in BIST as well.
• The TRY strengthened considerably after the U.S. CPI figures to around 18.48-50, but is since trading slightly weaker at 18.51, and the DXY is trading considerably lower at 107.86. The 2yr rates fell by 5bps to 14.43%, whereas the 10yr yields remained flat at 12.42%.
• On the commodity front, Brent has risen 2.8% from yesterday’s BIST closing time to USD 94.8, and both ounce and gram GOLD prices are trading higher at USD 1760 and TRY 1047, respectively-thus, we may see yesterday’s interest in KOZAL and KOZAA shares continue today as well.
NEWS FLOW:
• MSCI TURKEY INDEX ADDITIONS/DELETIONS:
o SASA-HEKTS and YKBNK have been added to the MSCI Global Standard Index, as widely expected, with no deletions made
o AYGAZ-BRSAN, DOAS, GESAN, KONTR, KORDS, ODAS, OYAYO, SMRTG, and ZRGYO have been added, whereas AKSEN, CCOLA, GUBRF, HEKTS (due to its inclusion into Global Index), JANTS and KZBGY have been deleted.
• According to the daily Dunya, Treasury and Finance Minister, Dr. Nebati put an end to the VAT discount rumours for new automotives, stating that there was no tax discount, but rather an adjustment to the tax brackets according to cylinder size. Accordingly, we may see DOAS pare yesterday’s gains due to this development.
• TUPRS: Surge in brent crude is positive but indicative refinery spread erosion is negative. Diesel differential plunged down from US$83 to US$39 in a month. Negative for Tuprs’ 4Q margins.
• It really works! Way lower-than-expected, US core CPI for October came in at 0.3% vs 0.5% consensus pulling down the annual figure by 30bp m-m to 6.3%. Headline CPI was also lower than forecasts at 0.4% vs the 0.6% consensus. The headline CPI moderated to 7.7% that is 30bp below expectations and 50bp below the September figure. The tamed inflation data triggered risk-on mood in all stock markets, DXY came down, US 10y bond yield instantly plunged from 4.08 to 3.90. The likes of the FOMC going for a 75bp rate hike on December 14th disappeared (just 3.7%) on the back of lower CPI, from odds of 30% chance right before the inflation announcement. Positive for commodities, EMFX, equities and downbeat for rates.
• Moody’s has revised up its growth forecast for Turkey to 5.3% from 4.5% for 2022, while seeing a slowdown for 2023, 2024.
Equity and Bond Transactions by Non-Residents
• According to CBRT data, non-residents bought US$38mn of stocks adjusted for price and exchange rate effects in the week of 28 October and 4 November and sold US$8mn of bonds bringing the net foreign inflow to US$30mn. After 8 consecutive weeks of foreign sell-off, we observe that foreigners started to get in the game on the equity front. Since the beginning of 2022, total foreign outflow from the BIST has been US$3.68bn dollars, while US$2.12bn dollars of foreign outflow was realized on the Fixed Income side. In total, foreign outflows from stocks and government securities totalled US$5.8bn dollars since the beginning of the year. The share of foreigners in bonds is still 0.80% from while their share in stock market came down to 30.0% as of today which was 30.8% in the previous week.
• While the FX deposits of real persons have been declining since the beginning of the year, we observe that the foreign currency accounts of companies have been on an upward trend since their dip-level in March.
• FX deposits of real persons decreased slightly by 0.9% while FX deposit of corporates increased by 1.25% presumably on the back of the banks’ marketing efforts to comply with the latest conversion regulations in the week ending on November 4th. In all, individuals’ and corporates’ FX deposits slipped down by 14.8% and 2.5% respectively, ytd.
AGENDA:
• On the local front, Sep. Balance of Payments and Industrial Production will be released, whereas on the international front, Germany CPI, UK growth rate, and U.S. Michigan Consumer Sentiment numbers will be followed.



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