TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

" MSCI Asia is up by 1% with Japanese stocks in the lead on strong quarterly earnings while Chinese markets down almost 1% as concerns over property markets triggered a fresh wave of selling in the market. European futures are slightly negative after Friday's positive closings and the US futures are flattish. We expect positive opening for BIST as global stock markets entered the week positively.
" S&P Global Senior Director Frank Gill told Bloomberg HT that the disinflation process in Turkey could begin in 2024-2025 because Turkey has not yet benefited from capital inflows.
" With the amendment published in the Official Gazette, it was announced that the value of 1 euro in human medicinal products was increased by 30.5% and determined as TRY14.04. While still being insufficient given the current level of EURTRY at 30, it will provide some relief to the sector. We expect positive implications on SELEC and ECILC.
" Putin said that the Black Sea Grain Agreement has lost its meaning, and therefore Russia has withdrawn from this agreement.
" The NATO-Ukraine Council, will meet at Vilnius with the invitation of Zelenskiy to discuss the shipment of Ukrainian grain thru the Black Sea.
" Per announcement by General Directorate of Accounting by the Ministry of Treasury and Finance, the statutory interest rate will be applied as 9% if not determined by contract and 16.75% in commercial affairs, as of July 1.

AGENDA
" CBRT's 3rd Inflation Report Meeting will be held in Ankara on 27 July. We as TFG Istanbul will be in this meeting.
" The Fed and ECB interest rate decisions will be on top of this week's agenda on the global side. We envisage 25bp rate hike from each.
" The Fed's interest rate decision will be announced on Wednesday at 9 PM Turkish time.
" The ECB's interest rate decision will be announced on Thursday at 3:15 PM Turkish time.
" Presidency's Directorate of Communications announced that on July 25 Palestinian President Abbas and on 28 July Israel Prime Minister Benjamin Netanyahu will visit Turkey. Health issue of Netanyahu may prevent this visit though. Likes of a gas agreement between Turkey and Israel may reflect positively on energy and infrastructure companies such as Enka in our view.
" Egyptian President Sisi's official visit to Turkey on July 27 is a sign of recovering ties with Egypt and will pave the way to secure a demarcation agreement with Egypt in the eastern Mediterranean in our view. A maritime demarcation agreement can solidify Turkey's presence in the Mediterranean and may also provide an upper hand for gas search. Improved bilateral relations may help BIM markets to grow faster in Egypt, BIM has negligible presence in Egypt currently.

COMPANY NEWS
" ARCLK: NEUTRAL - Posted TRY492mn net profit in its 2Q23 financials that is 35% below the TRY759mn consensus. While this may look downbeat for the stock at the first glance, the operational performance eases the worries to a large extent. TRY5bn EBITDA is 2% above the expectations. EBITDA margin at 10.7% for 2Q23 is slightly above expectations. Neutral market reaction likely.
" YKBNK: NEUTRAL - Yapi Kredi Bank posted TRY11.5bn net profit in its 2Q23 financials that fell a tad short of our TRY11.75bn forecast (Foreks consensus:TRY11.3bn). The bottom-line is 9% weaker q-q and down 4% as compared to 2Q22. Weaker profit evolution stems from plunging NII that is almost halved both q-q and y-y due to contracting core spreads as well as change in the CPI base of linkers from 45% to 40%. While trading gains that predominantly sourced from wide bid-ask spreads on FX trading of clients compensated for most of the NII related negatives, it wasn't sufficient to prevent profit contraction q-q and y-y.
The bank upped its ROE guidance for 2023 from high-twenties to over 30%, which should be attributed to strong trading line in our view. It has also revised up its fee growth guidance from >60% to >90% and cost growth guidance from <100% to=""><120%.>
We expect neutral market reaction to these numbers.
" ALARK: As a result of the land development works carried out in the Company's land located in İstanbul Province, Tuzla District, Orhanlı Neighbourhood, which is owned by its subsidiary Alarko Konut Projeleri Gelistirme A.Ş.; Logistics Warehouse Project regarding the aforementioned land has been approved by Tuzla Municipality and two different construction licenses covering a total construction area of 93.139.11 m² (logistics warehouse) and total construction area of 6.030.35 m² (external structure / retaining walls) have been obtained.
" ODAS, CANTE: The sale of 40 mn shares of Can2 Termik A.Ş., a subsidiary of Odas with a 76.77% shareholding, with a total value of TRY818.8mn, has been realised in the stock exchange Friday, and all of the resources to be obtained will be transferred to CANTE as capital advance and the entire resource will be used in the early debt payment of CANTE.
" ASTOR: It has been decided to make the necessary investments to increase the current capacity by 60% to meet the required capacity need in the coming period and to complete the said investments within a period of 1 year.
 
 TFG Istanbul Menkul Değerler A.Ş.
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