TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

Even Moody's Mood Swing Could not Carry BIST Higher
" As if observing a Deja-vu from the previous day, the BIST started the day on strong gains, but ended on profit-takings, closing yesterday 0.60% lower in value at 7691, with a turnover of TRY 146.9bn, despite the outperformance of the Banks, thanks to Moody's outlook upgrade on the sector to Stable from Negative, which we will discuss in further detail below.
" YKBNK, AKSEN and ODAS led the gains among the BIST30 stocks, whereas BIMAS faced profit-taking after its recent surge, falling by nearly 5%, and thus anchoring the Blue-chip stocks, and followed by ALARK and TOASO shares.
" Moody's yesterday upgraded the Turkey Banking Outlook to Stable from Negative but warned that the tough operating environment for the banks remains "challenging and volatile, citing an expected slowdown in economic growth and high inflation. The Ratings Agency expected real GDP growth rate to fall to 4.2% in 2023 from 5.6% in 2022.
" Today, we expect a flat opening, as the Asian markets are mirroring yesterday's negative closure in the US, with a negative opening expected in the European markets ahead of the GDP and UK inflation figures.
" The TRY is currently trading flat this morning at 27.07, testing the 27.09 level earlier against the USD, and is also flat at 29.55 against the Euro, while the DXY is just a tad higher at 103.15. On the Bonds' side 10yr rates rose by 35bps to 19.28%.
" Brent is trading lower at USD 84.21, while ounce and gram GOLD calm at USD 1905 and TRY 1658, respectively.
" US, Retail Sales rose by 0.7% in July, thus beating the estimates, however, also worrying investors of continued incremental rate hikes, with the 10yr rates soaring to 4.26%, thus triggering the excuse for profit-takings at the markets, before relaxing to 4.19%.
" Minneapolis Federal Reserve President Neel Kashkari stated that he favours getting tougher on regional banks- consequently causing for them to fall yesterday, following the earlier this year that he said may not be over, also adding that that while the U.S. central bank has made some progress in its inflation fight, interest rates may still need to go higher to finish the job, "I'm not ready to say that we're done,"
" In Turkey July Home Sales rose by 16.7% y/y to 109,548, however, homes sales to foreigners fell by 28.9% for July, to 2,801.
" According to the daily Ekonomim, the risk of a delay in the Black Sea Wheat Corridor deal risks the price of agriculture commodity prices to continue, according to the FAO Head Economist, Mr. Maximo Torero.
AGENDA:
" On the local front, the House Price Index will be disclosed, whereas the most important news flow from abroad will be "What were the Fed Officials Thinking?" the answer to be disclosed at tonight's FOMC Minutes, as well as the Eurozone GDP Growth and IP Figures, alongside the US IP figures, Capacity Utilization Rate, and the CPI figures from the UK will keep investors on their toes.
2Q23 FINANCIAL RESULTS:
" ASELS: NEGATIVE: While Aselsan's EBITDA (TRY2.5bn) and top line (TRY7.9bn) for 2Q23 were in-line with forecasts, the net profit of TRY3.1bn trailed the consensus by 29% predominantly due to the unexpected tax burden and somewhat elevated FX losses. The reason why we expect a negative market reaction is not the profit evolution but lack of cash collections. The net debt more than doubled q-q to an all-time peak of TRY13.9bn. Net debt/EBITDA of 1.2x while doubling q-q to an all-time high, cannot be deemed as an alarming level. Yet, the upward indebtedness trajectory of a company that used to post net cash positions up until 3 years back is upsetting. Aselsan's trailing P/E and EV/EBITDA of 13x and 17x look stretched in our view particularly growth rates that barely surpass y-y inflation are taken into consideration. 2023 guidance: EBITDA margin >24% (2Q:25.5%), sales growth >65% (2Q:51%).
" SELEC: NEGATIVE: Selcuk Ecza's 2Q23 EBITDA came in 34% below the consensus at TRY378mn (down 17% y-y and 70% q-q). Net profit was also 23% below the consensus at TRY378mn. The 2.2% EBITDA margin is the lowest ever for a 2Q and 1pp below expectations. The valuation does not look appealing at 11x trailing P/E and 9x EV/EBITDA coupled with weakening operational performance. We expect a negative market reaction to these numbers.
" AKSEN: POSITIVE: Aksa Enerji posted TRY1.45bn EBITDA that is 17% better than consensus, and the TRY1.3bn net profit is 26% higher than expectations. The 28% EBITDA margin is 5pp beyond expectations and one of the highest ever. While the 2Q23 operational profit performance surprised us on the upside and we do expect a positive market reaction, we do not like the cash generation performance and shrinking profit. 12x trailing P/E and 10x EV/EBITDA look fair in our view.
CORPORATE NEWS:
" ENERYA and IZENR: Shares will start trading today at the BIST.
" AGESA: Jan-Jul premiums rose by 107% to TRY 3.8bn.



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