Tellimer

Turkey: We expect the index to test its first resistance at 1463

  • We had some rebound of last week’s sell-off as rotation to banks from outperforming industrials continued.
  • President Erdogan announced a fiscal package worth of USD556mn towards small businesses (0.02% of GDP).
  • There was bad news from Russia as they decided to withhold flights to Turkey until the end of June

We had some rebound of last week’s sell-off as rotation to banks (mostly to Garanti & Akbank, as state banks continue to underperform) from outperforming industrials continued. President Erdogan announced a fiscal package worth USD556mn towards small businesses (0.02% of GDP), bringing total fiscal help since the start of the pandemic in March 2020 to 4.06% of GDP.

There was bad news from Russia as they decided to withhold flights to Turkey until the end of June, meaning a lost tourism season for Turkey. We do not expect important numbers from other big markets like Germany, UK etc, hence 2021 tourism revenues will at best be at similar levels to 2020(USD13bn).

This means there will be more pressure on Lira if the trade deficit does not start to come down more as other sources of FX(portfolio flows, FDI) We expect the index to test its first resistance at 1463 and then try 1492 and 1520 if global sentiment remains positive, the support levels are at 1438 and 1422. Garanti, Tupras and Tofas are the names that look attractive for short-term trades.

Company news:

PGSUS: total PAX was down by 22% m/m in April. On a segmental basis, domestic PAX was down by 28% m/m in Apr 2021 whereas international PAX declined by 8% m/m during the same period. Year-over-year comparison is not possible since Pegasus does not provide load factor data for Apr 2020. International share in total ASK came at 61% in Apr 2021. Total load factor (LF) was down 1080bps m/m to 66.7% in Apr 2021 due to 780bps and 1440bps decline in domestic and international load factor, respectively. Although load factor in Mar 2021 is 66.7%, when we adjust this KPI for aircrafts on the ground by dividing PAX in Apr 2021 to seats of Apr 2019, we find a load factor of %37.4. Currently, we expect 2021E ASK to be 31.3bn compared to 22.3bn in 2020 and 2021E load factor to be %77.4 compared to %80.2 in 2020. We also expect total PAX to increase to 19.3mn in 2021E from 14.7mn in 2020. Recall that total PAX of 14.7mn in 2020 was 52.2% below total PAX of 30.8mn back in 2019. We believe it might take several years to catch 2019 PAX figures depending on the pace of easing in Covid-19 restrictions. We might receive more clear signals starting by this spring regarding the travel trends.

ARCLK: announced that the agreement to buy 100% of Whirlpool White Goods for EUR 78.3 mn signed 

PETKM: proposed no dividend payout from 2020 profit

KLKIM: New IPO will start trading in BIST on May, 18th with a reference price of TL 14.75


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