Morning Note /
Turkey

Turkey: Equities inflation rally continues

  • Turkish equities were up 7.5% w/w, led by the 7.9% rise industrials index, while banking index was up 4%

  • Equities inflation rally continues as there is no other Lira asset to protect savers

  • Overall dollarization of the system has climbed to 62%, an all time high and the reversal of this will not be easy

ATA Invest
6 December 2021
Published byATA Invest

Turkish equities were up 7.5% w/w, led by the 7.9% rise industrials index, while the banking index was up 4%. Equities inflation rally continues as there is no other Lira asset to protect savers while we have record negative real interest rates.

There is no special or differentiating theme anymore until it becomes obvious to what degree the Lira devaluation is hurting the economy.

Overall dollarization of the system has climbed to 62%, an all-time high and the reversal of this will not be easy.

Company news:

Turk Traktor <TTRAK TI> total sales volume was flat y/y in November...

 On a segmental basis, domestic volume decreased by 15% y/y whereas export sales volume increased by 35% y/y respectively.

Going forward, we foresee TTRAK’s domestic tractor sales volume to increase by 46% y/y to 32.5K units and export sales volume to increase by 25% y/y to 15.6K units in 2021E.

We maintain our “Outperform” recommendation for TTRAK with our 12M TP of TL226.0.

Based on our estimates, the company trades at 22E 5.6x EV/EBITDA and 22E 7.4x P/E, compared to its 5-year average 6.7x EV/EBITDA and 9.0x P/E multiple.

Weekly Agenda:

Dec 06: November Real Effective Exchange Rate( October 60.37)

Dec 07: Nov Cash Budget Balance

Dec 10: CBRT December Expectations Survey Dec 10: October Unemployment Rate (September 11.5%)

Dec 13: October Current Account Balance (Consensus USD1.65bn)

Dec 13: October Industrial production