Morning Note /
Turkey

Turkey: We start again

  • We are starting off again after a very strong week for Turkish equities, as finally banks gave some fire to the rally

  • Bank shares had been underperforming since the beginning of the war

  • Estimates for banking sector’s full year profits according to Bloomberg have increased by 50% since January

Batuhan Ozsahin
ATA Invest
11 April 2022
Published by

We are starting off after what was a very strong week for Turkish equities last week, as finally banks gave some fire to the rally.

Bank shares had been underperforming since the beginning of the war, as the macro outlook justified some of the fears that banks would have been punished at the end. So, we believe there was a lot of short-selling of Turkish banks as it seemed like a sure bet and we saw a lot of selling of banking shares in March.

Hence, we believe some of the recent rally is short-covering, but banks will have a fantastic quarter anyway. Estimates for the banking sector’s full-year profits according to Bloomberg have increased by 50% since January, as annualised CPI reached 61% and the income the banks will book from CPI-Linkers will be at a record high. Most banks could record 1Q profits that are at least 50% of FY21 profits, so momentum should remain strong despite occasional profit-taking.

Macro news:

CBT Survey of Participants: 2022 year-end inflation expectations realized at 46.44% in Apr’22. 2022 year-end US$/TL rate expectation realised at 16.85 in Apr’22. 2022 GDP growth expectations realised at 3.2% in Apr’22. Current Account Balance expectations realised at -US$27.5bn in Apr’22.

Company news:

*SAHOL TI> bought back 700K shares at an average price of TL18.49 on 08 Apr 2022.Since 09 Nov 2021, the total number of shares bought back reached 37.6mn at an average price of TL15.16.

*ENJSA TI> goes ex-dividend today, paying TL1.24/shr (7.21% div. yield) The reference price will be TL 15.96

*DEVA TI> goes ex-dividend today, paying TL0.15/shr (0.47% div. yield) The reference price will be TL 31.57

Weekly Agenda:

11 April: February Current Account Balance( Consensus -USD5.3bn)

11 April: February Unemployment Rate( No Consensus -USD7.11bn)

12 April: February Industrial Production( Consensus 2.7% m/m, 7.5% y/y)

14 April: CBRT MPC policy rate decision( Consensus 14%- No Change)