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Turkey: We expect slight negative opening

  • We start the day again with some slight lira depreciation and a slight negative opening in BIST is likely as well
  • Eyes today will be on US as nonfarm payroll will be out
  • There is an expectation in market that President will announce today new discoveries of natural gas in Black Sea region

The positive trend in the morning which occurred after the better-than-expected inflation numbers, turned to negative again yet the market was able to close slightly below 1,430 resistance in the afternoon. We start the day again with some slight TL depreciation and a slight negative opening in BIST is likely as well. Eyes today will be on US as non-farm payroll will be out. There is an expectation in the market that President Erdogan will announce today the new discoveries of natural gas in Black Sea region.

Macro news:

Consumer Price Index (CPI) increased by 0.89% m/m in May’21. (Bloomberg consensus: +1.32%) CPI increased by 0.89% m/m to 16.59% y/y in May’21. PPI increased by 38.33% y/y in May’21. With the highest share in the calculation (%25.94), Food and Non-Alcoholic beverages increased by 0.29% m/m (+%17.04 y/y) in May’21. Core inflation (excluding alcoholic beverages, tobacco products, energy and gold, B) increased by 17.49% y/y in May’21 (Apr’21: 18.11% y/y). With the Inflation Report published in Apr’21, Central Bank of Turkey’s 2021 inflation target is 12.2% (ATA Est.: 14.4% y/y).

Company news:

ATPTP: will start trading in BIST today. Reference price TL 24.

TTRAK: total sales volume increased by 132% y/y in May <Neutral> On a segmental basis, domestic and export sales volume surged by 172% and 77% y/y respectively thanks to low base. We believe the company managed to survive through turbulent times between 2018-2020. The company also managed to turned to TL287mn net cash as of 1Q21. Going forward, we foresee TTRAK’s domestic tractor sales volume to increase by 30% y/y to 28.8K units and export sales volume to increase by 16% y/y to 14.6K units in 2021E. Company officials hinted during 1Q21 teleconference that demand outlook continues to look strong till May 2021. However, we believe that most of the positives are priced in. We maintain our “Marketperform” recommendation for TTRAK with our 12M TP of TL200.


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