Morning Note /

Turkey: We have the CBRT meeting today

  • FED delivered what was expected of it with a hawkish tilt and both USD and UST10s are taking a breather

  • We have the CBRT meeting today and consensus is a no hike

  • There has been market speculation in the past one week that CBRT could hike about 250bps

ATA Invest
17 March 2022
Published byATA Invest

FED delivered what was expected of it with a hawkish tilt and both USD and UST10s are taking breather after their rallies. The war also helped USD assets recently, hence a framework that will be agreed upon a ceasefire could bring some more profit-taking trades whereas equities could continue their bounce back and that is exactly what exactly Euro Stoxx 50 has been doing. After peaking in early January at 4410, it corrected till 3505 and has rebounded roughly to its current level of 3889.

We have the CBRT meeting today and the consensus is a no hike. There has been market speculation in the past week that the CBRT could hike about 250bps, which is not a game-changer in our view. The disconnect between policy rate and inflation is so large (14% vs 54%), a small change will not do anything and because we know what the political stance is, it will only be a one time and they will not be able to do anymore. Hence a hike could bring a sprinkle of misleading optimism, by strengthening the Lira and maybe some more buying to equities but the decline in Brent should be only real driver in Lira, as the energy-related trade deficit is our main problem in 2022.

If there is a ceasefire, we could see some profit-taking in war-related themes (shortage of commodities and higher prices) and probably aviation taking a bigger breather with lower oil costs etc

Company news:

*MPARK TI> announced than the company signed a share transfer agreement regarding two of its subsidiaries with MP Sağlık Hizmetleri A.Ş. (slightly positive) According to this share transfer agreement, Medicalpark will transfer its 56% shares in Sentez Sağlık Hizmetleri A.Ş ("Sentez"), one of its subsidiaries, to MP Sağlık (which is not a group company) and Medicalpark will increase its shareholding from 75% to 100% by purchasing 25% in MS Sağlık Hizmetleri Ticaret A.Ş ("MS Sağlık"), from MP Sağlık. By this transaction, Medicalpark is tranfering 3 of its hospitals in İzmir, Gaziantep and Batman to Sentez Sağlık therefore completely exiting out of 3 hospitals and in return Medicalpark will receive full control of Liv Hospital Ankara. According to the company’s announcement, share transfer agreement is a conditional/forward agreement and the share transfers will be realized after the Competition Board's permission. We believe that this share transfer agreement will simplfy the company’s shareholder structure.

Weekly Agenda:

March 17: CBRT One-Week Repo Rate (Current 14%, Consensus 14%)