Morning Note /
Global

Turkey: Government’s new measures intended to mitigate retail investor demand

  • There was a lot of short Lira positions, so we are seeing a lot of short squeeze as well

  • Banks and all FX-cost companies will be the winners of today

  • Borsa Istanbul uptick for BIST50 short sales extended to today

ATA Invest
21 December 2021
Published byATA Invest

Turkish lira fell as much as 23% on Monday at one point as the fear of inflation getting out of control and the deep negative territory that the future real interest rates implied. The lira now trades 11.12 per dollar, from a record low of 18.36 only 24 hours ago. The government’s new measures are intended to mitigate retail investors’ demand for dollars and bring an end to three months of turmoil for the Lira. There were a lot of short Lira positions, so we are seeing a lot of short squeezes as well.

Banks and all FX-cost companies will be the winners of today, while darlings of the past month, Eregli, Sise, Tupras, Arcelk, which were bought as inflation hedges, are likely to be losers. So, the index might fall as index-heavyweights correct but small & mid-caps that were whip-sawed on Friday and Monday will rebound strongly as risk perception declines.

Macro news:

Borsa Istanbul uptick for BIST50 short sales extended to today.

Company news:

* BIMAS TI> bought back 600K shares at an average price of TL74.94 on 20 Dec 2021. Since 6 Dec 2021, the total number of shares bought back reached 1,347K at an average price of TL76.28.

*ARCLK TI> bought back 945K shares at an average price of TL50.23 on 20 Dec 2021. Since 02 July 2021, the total number of shares bought back reached 35.1mn at an average price of TL32.79

*PETKM TI> announced that Goldman Sachs International has exercised the put option on 30% of Petlim and the purchase transaction of 30% of Petlim's capital has been completed by STEAS (SOCAR Turkey Enerji A.Ş.) (neutral) After the transaction, STEAŞ owns %30 of Petlim and Petkim continues to own %70 of Petlim. Please note that, %30 of Petlim Limancılık Ticaret A.Ş.'s (Petlim) capital was purchased by Goldman Sachs in 2014 at a value of US$250mn and simultaneously, a 7 years put option agreement between Goldman Sachs International and STEAS.