Morning Note /

Turkey: We expect a flat opening

  • Both the global markets and BIST 100 are testing historical high levels

  • BIST 100 traded above 1600 level and closed at 1,608 level yesterday.

  • The breathless rise in the index signals a correction

Zeynep Erman
Zeynep Erman

Equity Research Analyst

Batuhan Ozsahin
ATA Invest
9 November 2021
Published by

Both the global markets and BIST 100 are testing historical high levels. BIST 100 traded above 1600 level and closed at 1,608 level yesterday. The breathless rise in the index signals a correction. Following the end of the earnings season tomorrow, eyes will be on macro trends again. Today we expect a flat opening.

Macro news:

The CBRT raised reserve requirement ratios for foreign currency deposits by 200 basis points. The reserve requirement ratio for FX deposits/participation funds up to one-year maturity was raised to 25% from 23% and the ratio for those with one year or longer maturity was raised to 19% from 17%. The reserve requirement ratio for precious metal deposit accounts up to one-year maturity was raised to 26% from 24% and the ratio for those with one year or longer maturity was raised to 22% from 20%. Lira-denominated required reserves are expected to increase by approximately 7.4bn liras, and foreign currency required reserves are expected to increase by an equivalent of approximately US$3.8bn. Following the newsflow we may expect 100 bp more rate cut till year-end.

Company news:

Koc Holding <KCHOL TI> to buy 18% of Yapıkredibank from Unicredit. Based on the previously signed share purchase agreement on 11.30.2019 between Koc Holding, Unicredit & Koc Finansal Hizmetler, Koc Holding had the first right of purchase offer for Unicredit’s 18% of Yapı Kredi’s share capital, Koc Holding has offered to buy YKB shares for TL2.2980/share. As after the purchase, Koc Holding’s direct & indirect shareholding in YKB’s capital will exceed 50%, there will be a mandatory share call for the shares outstanding as free float.

The call price will be determined based on

The simple arithmetic average of the share price for 6-month prior to the announcement of the deal(5.11-30.11 2019) which is TL2.3940/share

Will not be lower than the highest price paid in the past Including Koc Holding’s the share purchase price of TL2.2980/share,

Koc Holding had net cash position of USD397mn as of 3Q21.

History: Yapi Kredi- Koc Holding: UniCredit and Koc Holding agreed to unwind their JV in Yapi Kredi Bank. As a result, Koc will sell 31.93% of YKB to Uncicredit for TRY5.72bn, while buying 9.02% of YKB for TRY1.67bn as Koc and Unicredit will exit the special purpose vehicle through which it and Koc hold a combined stake of over 80% stake in the bank. The deal implies a TRY2.12/share for YKB(12% discount to Friday's closing and 0.45x implied P/B). Following the transaction, UniCredit will hold a 31.93% direct stake at YKB and Koc's direct stake(9.02%) and indirect stake YKB will reach to 49.99%. The transaction will not require a mandatory call for minority shareholders. The remaining shares of Yapi Kredi of about 18% will continue to trade as free-float and UniCredit won’t sell its remaining stake without a written approval of Koc until November 15, 2021, except through an accelerated book-building.

Bimas <BIMAS TI> 3Q21 Results: Better than expected results... Bim realised TL884mn net income in 3Q21, higher than our estimate of TL701mn and consensus estimate of TL745mn. Stronger than expected net income could be attributed to higher than EBIT (TL44mn) and tax income related to asset revaluation (TL122mn). Net sales were 0.6% above our estimates but 1.0% below consensus estimate. EBITDA margin of 8.6% was higher than our estimate of 8.4% parallel to consensus estimate of 8.6%. 9M21 results support the company’s 2021E topline growth guidance of “20-25%” and EBITDA margin guidance of 8.0% (+-0.5pt) as well as our 2021E estimates.

Sisecam <SISE TI> BoD decided to invest in 7CBasalia, a biotech company which transforms all kinds of waste into harmless substances… <Neutral> Founded in 2020 by scientist Ahmet Başal and his partners, 7CBasalia is a new generation waste sorting company. Basalia’s technology transforms wastewater into pure water. As a result of the process, wastewater becomes reusable and turns into a resource again. Thanks to the system, which focuses on providing a solution to the solid waste problem, solid wastes combined with organic waste first become harmless. Then, hydrogen gas, an environmentally friendly energy source, can be obtained through these wastes. Working in cooperation with international institutions in climate change, environment and sustainability, Basalia offers solutions to companies with waste problems, while aiming to produce green city solutions city and country administrations. This investment will be the first biotech investment of Şişecam, which operates in 9 different business lines.

Odas <ODAS TI> 3Q21 Results: Thanks to deferred tax income and lower financial expenses, Odas posted TL50mn net income in 3Q21. Revenues of TL413mn was up by 82% y/y in 3Q21. The company’s EBITDA increased by 76% y/y to TL112mn TL in 3Q21. Net debt declined by 23% q/q to TL1,499mn in 3Q21. This implies 4.29x net debt to EBITDA multiple (2Q21:6.49x).

Weekly Agenda:

10 Nov: September Unemployment rate (12.1%)

11 Nov: September Current Account Balance (Consensus +US$1.4)

12 Nov: November CBRT Macro Expectations Survey

12 Nov: September Industrial Production (Consensus -0.7%)