Morning Note /
Turkey

Turkey: The index is reaching towards its critical level of US$3

  • Turkish equities continued to be a on a tear with the help of the banking stocks( banking index up 9%)

  • The two state banks, Halkbank & Vakıfbank were limit up already in the day and the led other banks to charge on

  • Turkish equities have completely de-coupled from global markets

ATA Invest
20 December 2022
Published byATA Invest

Turkish equities continued to be a on a tear with the help of the banking stocks( banking index up 9%). The two state banks, Halkbank & Vakıfbank were limit up already in the day and the led other banks to charge on. On the stock exchanges bulletin, we see record amounts of short positions opened during the day( TRY2.7bn for YKBNK, TRY1.8bn for ISCTR, TRY 1.4bn for AKBNK). We believe record amount of shorts led to a squeeze in the market, where we continue to see record amount of flows. Turkish equities have completely de-coupled from global markets and are seeing huge interest from local investors as deeply negative real interest rates continue to push investors seek for better returns elsewhere and there are not many alternatives. This has become a self-fulfilling prophecy. The index is reaching to its critical level of US$3, above which there is no macro reality to support any level above that    

Company news:

Coca Cola İcecek <CCOLA TI> announced that Competition Board decided to impose an administrative fine of TL272mn to Coca-Cola Satış ve Dağıtım A.Ş. (slightly negative).

Competition Board decided to impose an administrative fine of TL272mn to CCSD regarding various information and documents obtained within the scope of the investigation carried out about some undertakings by manufacturers/suppliers and retailers in the fast moving consumer goods sector. The company announced that CCOLA prefered to pay fine given to CCSD as TL204mn within the legal period by taking advantage of the 25% early payment discount. According to the company’s announcement, CCOLA will include a provision in the amount of the relevant fine with its  year end financials. 

Coca Cola Icecek did not accept the alleged charges and the comapny will apply to Ankara Administrative Courts within the legal period regarding the annulment of the penalty.

Please note that Coca Cola Icecek generated TL6.2bn and TL8.7bn domestic sales revenue in 2020 and 2021, respectively. One-off penalty expense have 5% negative impact on net income estimate of TL4.3bn for 2022E and we believe that the initial reaction to the penalty decisions will be slightly negative on stock. We have a BUY recommendation for Coca Cola Icecek, our 12M TP implies 9% upside potential for CCOLA and we continue to keep stocks in our top pick list.

SISECAM <SISE TI> Sisecam decided to increase its investment plan which is implying roughly %9 rise in addition to CAPEX until 2024,in frosted glass furnace and energy glass processing line in Mersin.

Sisecam Board’s decided to increase its planned frosted glass furnace production capacity to 244K tons/year from 180K tons/year and planned energy glass processing line capacity to 26.6mn m2/year from 20mn m2/year. The company increased its CAPEX plan to EUR228mn from EUR185mn for these investments. The new production capacity is expected to be commissioned by the end of 2024.

Tav Airports <TAVHL TI> Ankara Esenboga tender will be held today will participate in the tender.

Weekly Agenda:

Dec20: Dec Economic Confidence Index

Dec 22: CBRT Interest Rate decision ( CBRT is expected to leave policy rate at 9% after cutting it 500bps in the last 3 meetings)

Dec22: BRSA Weekly banking sector data