Morning Note /
Turkey

Turkey: We expect a flattish opening

  • Turkish equities faced another volatile day

  • Banking sector shares are leading the rally which we can not explain fundamentally

  • We remain positive on industrials and aviation sector

ATA Invest
9 September 2022
Published byATA Invest

Turkish equities faced another volatile day- which is the new normal nowadays- and closed at 3,437 level yesterday. Banking sector shares are leading the rally which we can not explain fundamentally. We remain positive on industrials and aviation sector. Unless 3,360 support will be broken down we expect to test 3,500 levels. THYAO has been under strong selling spree yesterday and in case it is over we expect a rebound today. TOASO also signals a strong upside.

Company news:

*MPARK TI> bought back 12K shares at an average price of TL45.05 on 8 September 2022. Since 25 May 2022, the total number of shares bought back reached 3.4mn at an average price of TL37.93.

*THYAO TI> Pax Trends - Total pax was up 32% y/y while surpassing August 2019 levels by 6%...Total pax was up by 32% y/y to 7.85mn in August 2022 which was at 106% of its 2019 level. Domestic pax was down by 2% y/y in August 2022 whereas direct international pax and int to int transfer pax were up 61% and 76% y/y, respectively, during the same period. Domestic and international pax were at 95% and 124% of its 2019 level, respectively. Available seat km (ASK) increased by 39% y/y in August 2022 to 20.4bn,which was at 114% of its 2019 level. Total load factor was up by 1,288bps y/y to 86.1% in August 2022 due to 841bps and 1,412bps y/y increase in domestic and international load factor, respectively. Although load factor in August 2022 is 86.1%, when we adjust this KPI for aircrafts on the ground by dividing revenue passenger km (RPK) in August 2022 to ASK of August 2019, we find a load factor of 98.3%. Considering adjusted load factor was 102.1% in July 2022, we observe a m/m decline in load factor. International pax in 8M22 was 115% above 8M21. Moreover international pax in 8M22 was 3% above 8M19. Domestic pax 8M22 was 38% higher than 8M21 but still 18% below 8M19.

*TAVHL TI>Total PAX in TAV airports increased by %25 y/y to 10.8mn in August, reaching 92.2% of its 2019 level.(Positive) Domestic PAX in Tav airports increased to 2.85mn in August which was 92% of its 2019 level. Considering domestic PAX in TAV was 2.79mn in July, there is a m/m increase in domestic PAX trend. International PAX increased by 41% y/y to 7.9mn in August which was 92.3% of its 2019 level. Considering international PAX in Turkey was 7.52mn in July, there is a m/m rise in international PAX trend in Tav Airports. Total pax also increased to 733K in August which is 104% of its 2019 level in Almaty.