Morning Note /
Global

Turkey: The volatility in BIST continues

  • Global markets are relatively positive this morning

  • Germany had its first monthly trade deficit since 1991 due to the rising costs for imports and less demand

  • Turkey’s inflation announced lower than expectations

ATA Invest
5 July 2022
Published byATA Invest

Global markets are relatively positive this morning. The global agenda is quiet. Yesterday Germany had its first monthly trade deficit since 1991 due to rising costs for imports and less demand for their products. The picture looks still foggy for European countries for the winter.

Turkey’s inflation announced lower than expectations. It is likely that we saw the top in inflation in June so a slightly lower trend in inflation is likely in the coming months. The volatility in BIST continues. A sudden and unexpected sale occurs in the market during the day. The positive trend will be limited in the market unless 2.490 resistance will be broken up. 2.380 is the daily support level.

We remain positive with TUPRS, TAVHL, THYAO, PGSUS

Macro news:

CPI increased by 4.95% m/m in Jun’22 (Bloomberg consensus: +5.73%). CPI increased by 4.95% m/m to 78.62% y/y in Jun’22. PPI increased by 6.77% m/m to 138.31% y/y in Jun’22. With the highest share in the calculation (%25.32), Food and Non-Alcoholic beverages increased by 2.09% m/m (+93.93% y/y) in Jun’22. Core inflation (excluding alcoholic beverages, tobacco products, energy and gold, B) increased by 64.42% y/y in Jun’22 (May’22: 61.63% y/y). With the Inflation Report published in April’22, Central Bank of Turkey increased its 2022 inflation target to 42.8% from 23.2%. (ATA Est.: 72.0%).

Company news:

* MPARK TI> bought back 56K shares at an average price of TL33.51 on 04 July 2022. Since 25 May 2022, the total number of shares bought back reached 1.3mn at an average price of TL34.43.

*SAHOL TI> bought back 500K shares at an average price of TL18.95 on 4 July 2022. Since 09 Nov 2021, the total number of shares bought back reached 54.5mn at an average price of TL16.66.

*TTRAK TI> total sales volume decreased by 19.8% y/y in June... On a segmental basis, domestic volume decreased by 27.5% y/y whereas export sales volume declined by 6.0% y/y respectively. Going forward, we foresee TTRAK’s domestic tractor sales volume to decrease by 14.8% y/y to 27.2K units and export sales volume to increase by 11.4% y/y to 18.0K units in 2022E. We maintain our “Outperform” recommendation for TTRAK with our 12M TP of TL336.00. Based on our estimates, the company trades at 22E 5.0x EV/EBITDA and 22E 5.6x P/E, compared to its 5-year average 6.5x EV/EBITDA and 7.6x P/E multiple.

*TURKISH AUTOS - June 2022 Domestic Sales: LV sales increased by 1.0% y/y to 80.1K in June 2022, better than our estimate of 73.7K. Turkish Light Vehicle (LV) sales increased by 1.0% y/y to 80.1K units in June’22, 9% higher than our estimate of 73.7K units at the beginning of the month. On a segmental basis, P. Car sales increased by 2.9% y/y to 64.1K units whereas LCV sales declined by 5.5% y/y to 16.5K units in June 2022. Our estimate for 2022E LV sales is 754K, implying 2% y/y increase.

Weekly Agenda:

July 5: June REER

July 7: BRSA Weekly Banking Sector Data

July 8: May CAD

July 8: July survey of expectations

July 8: Due to religious holiday there will only be half session trading in BIST