TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• The BIST100 saw negative trading early on yesterday, and never really managed to recover, and the 75bps rate hike from the ECB to 1.5%, only certified the inevitable negative closing, as the BIST fell by 1.05% to 3935, with a turnover of 67.2bn.
• The Banks led the falls, declining by 2.73%, as AKBNK’s 3Q22 financials failed to excite investors, and the Conglomerates fell by 1.38%, whereas the Aviation and Energy stocks diverged positively from their peers after the previous day’s losses.
• ARCLK, VESTL and TCELL led the gains at the BIST30, whereas TOASO, GARAN, and ISCTR were the most sold.
• We expect a flat opening today, please be aware that the market will close at noon today due to the October 29 Republic Day Holiday.
• Currently, the TRY is trading flat against the USD at 18.60, and the DXY has risen to 110.39. The 2yr yields fell by 8bps to 15.36%, whereas the 10yr yields rose 33bps to 12.03%. The 5yr CDS rates fell another 4pts yesterday to 673.
• On the commodity front, Brent had increased to USD 94.92, but is currently trading around the USD 94 ticker, and both ounce and gram GOLD prices are trading slightly lower at USD 1664 and TRY 996, respectively.
• The US economy grew by 2.6% vs the consensus 2.4%, thus formally ending the technical recession.
• The US 10yr rates fell yesterday to below the 3.96% level after peaking at 4.24% at the beginning of the week.
• At yesterday’s Inflation Meeting by the CBRT, the CB raised its year-end inflation estimate to 65.2% from 60.4% previously, and to 22.3% from 19.2% for 2023. CBRT Head, Mr. Sahap Kavcioglu stated that Turkish banks have no “systemic risk” due to regulations forcing them to purchase gov’t. Bonds.
• According to CBRT data, non-residents sold US$63mn of stocks adjusted for price and exchange rate effects in the week ending on October 7th. Total foreign outflow is US$74mn, including the US$12mn divestiture of fixed income instruments. Although the BIST continues to rise due to lack of real returns on alternative TRY instruments, Foreigners continue to reduce their positions to avoid exchange rate volatility risks. The share of foreigners in bonds fell to 0.81%, while their share in stock market is 31.3% that is at historical low levels. 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 by 0.27% w-w and reached US$111bn while FX deposit of corporates increased by 1.31% and reached US$78bn, corresponding to -14.3% and -2.9% changes ytd, respectively.
• BANKS: According to media sources, Banks are rising TRY Deposit Rates to increase the % of TRY deposits to over 50% of the total. We expect such a move to reflect negatively onto the margins, as well as the equity markets if sustained. Akbank claims that this is a short-term campaign only for new accounts and will end today.
• SASA: The CMB has approved SASA’s TRY 15.8mn allocated capital increase.
3Q22 RESULTS:
• BNTAS: Bantas’s 3Q financials are as strong as our expectations. Sales increased 114% y-y to TRY122mn, EBITDA increased by 174% to TRY20mn, net profit increased by 411% to TRY31mn. Solid profitability is supported by increasing margins, EBITDA margin increased 360bp y/y to 16.3%. Cumulative international sales increased by 207% y-y and reached to TL61mn, of which TL50.4mn was to Iraq, TL4.3mn to Bulgaria and TL6.8mn to Algeria. We believe that demand is likely to exist for the rest of the year as olive harvest season is centered between the end of September and the month of October. Buy maintained.
• GARAN: Garanti posted TRY17.5bn profit that is fully in line with TFG Istanbul estimate and 3% above the consensus. The beat could have been higher had the bank not set aside a TRY500mn discretionary provision lifting up the cumulative figure to TRY8bn. Garanti’s 3Q22 annualized ROE adjusted for discretionary provisions is at an all-time high of 59.3%, while the leverage is low at 7.3x. If the leverage was 10x, just like peer group average, the ROE could have been 69% as the ROA is an unmatched 6.9%. The primary operational performance indicator we are tracking for banks is the TRY loan-deposit spread. Garanti’s TRY LTD spread surged by 190bp q-q predominantly supported by climbing loan yields. Such a performance is not even comparable with Akbank’s 20bp TRY core spread improvement. The FX core spread of Garanti also improved by a sizeable 60bp, while that of Akbank was down 60bp q-q. What is more striking is that the bank managed to increase its margins despite visible market share gains in TL core consumer loans, SME loans and credit card acquiring volume. Solid results across the board. We stick to our long GARAN, short ISCTR call.
• AKCNS: NI TRY 826mn vs Cons. TRY 394mn beating the cons due to deferred tax payment.
• BRISA: NI TRY 552mn vs Cons. TRY 524mn vs TRY 170.3mn y/y
• GOODY: Goodyear’s tax financials released yesterday are not indicative for IFRS. We expect TRY363mn EBITDA and TRY173mn net profit for the 3Q22 IFRS financials that will be released on Monday.
AGENDA:
• On the local front today, The Bloomberg Oct. Turkey Economic Survey will be released, whereas on the international front, the US personal income and spending figures, Pending Home Sales and Michigan Consumer Sentiment will be released, as well as the Germany October CPI and 3Q22 GDP figures.

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