TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

" MSCI Asia is up by 1.7% on pledge of support for China's real estate market while the US and European futures are almost flat after yesterday's positive closings in the US markets led by Dow Jones. We expect positive opening for BIST with the support of positive mood in Asian stock markets as well as the support of CBRT's new steps.
" Aimed at supporting the efficient use of financial resources the CBRT published some quantitative tightening as well as easing steps.
On the details: Accordingly, the requirement to sell an additional 30% of export proceeds sourced FX to the CBRT for cheaper loans has been abolished. This move is set to support the profitability of exporters. Export growth performances will be taken into account in the disbursement of re-discount loans to SMEs. The daily cap on re-discount loans has been increased to TRY1.5bn. The import payments are kept exempt from the requirement of not purchasing any FX for the lifetime of re-discount loans. These steps are credit accretive and positive for exporting companies.
On the other side of the story, the monthly allowed maximum commercial loan growth rate has been pulled down to 2.5% from 3%. This is outright tightening as the new limitation will barely meet monthly interest accruals, especially with the removal of 1.4x reference rate barrier for commercial loan interest rates. This removal of the first cap should boost the loan rates and will also make the banks release some good portion of their long-term bonds held for this purpose. So demand for long term bonds will come down, increasing the interest rates particularly on long-end.
Last but not the least, the monthly growth ceiling for car loans has been pulled down from 3% to 2% and the monthly interest cap on overdraft loans has been increased from 1.91% to 2.89%. These steps are set to cool down car demand, hurting the automotive stocks, and may also result to individuals selling their FX holdings as the 41% annually compounded overdraft interest rate beats the inflation.
" China's top leaders have pledged to "timely adjust and optimize policies" for the beleaguered real estate sector.
" The U.S. Federal Reserve has fined Zurich-based bank UBS $268.5 million for risk management failures in its Credit Suisse transaction with Archegos Capital Management, which it acquired in June.
" Ambassador of the Republic of Turkey to London Osman Koray Ertaş stated that free trade agreement (FTA) negotiations between Turkey and the United Kingdom is foreseen to start in the first half of 2024.
" According to S&P Global data, the composite PMI index, which covers the manufacturing and services sectors, fell 1.2 points to 52, the lowest level in 5 months, in July.
" The German government plans to provide about EUR20bn in incentives to support the country's technology sector and secure chip production.
AGENDA
" Turkish Parliament will convene extraordinarily today.
" Capacity utilization rates for industrial production will be announced at 10Am Turkish time.
" 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 26 July at 9 PM Turkish time.
" The ECB's interest rate decision will be announced on 27 July at 3:15 PM Turkish time.
" Presidency's Directorate of Communications announced that on July 25 Palestinian President Abbas will visit Turkey.
" 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

" THYAO: Aimed at alleviating the impact of social and economic consequences of the earthquakes which took place in Kahramanmaraş on February 6 2023, The Company's Board of Directors decided to allocate an additional limit within the context of donations and aid that was disclosed on February 23, 2023.
" FROTO: It has been announced that there will be a break in production between July 31 and August 14 due to annual leaves at Gölcük Transit Line, Gölcük Custom Line, Yeniköy Plant and Eskişehir Plants, and the Craiova Factory will take a break between August 14 and August 31.


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