Turkish equities continued their strong momentum despite annual CPI reaching 61% and trade deficit in 1Q reached US$26bn( US$45bn in all of 2021). Although there was a strong continuous outflow from foreign investors, we have seen buying appetite from foreign investors for the first time. There was broad based buying in all sectors. Akbanl was the best performing bank, while most BIST-30 stocks did rise over 4%. We believe some of the buying yesterday might be short covering as well, after foreign investors might have shorted Turkey as the macro environment looked bleak with rising commodity prices. We believe the current strength will continue as equities offer the best inflation hedge for the time being, as all fixed income instruments are beaten heavily by inflation. Sky high inflation will help banks 1Q and FY2022 profits through CPI linkers, so we expect banks to remain strong throughout the earnings season. There were surprisingly 11 investors who tendered to BBVA’s Garanti call despite the price being never below 12.35( call price 12.20). The market would like to test its intra-day ATH of 2406 that we saw in December in the coming days.
Company News
Kartonsan <KARTN TI> goes ex-dividend today, paying TL1.83/shr (3.15% div. yield)
Arcelik <ARCLK TI> bought back 140K shares at an average price of TL60.30 on 4 April 2022.
Since 02 July 2021, the total number of shares bought back reached 58.0mn at an average price of TL40.71.
Migros' <MGROS TI> total number of stores reached 2,598 at the end of March, with a net increase of net 25 stores. (slightly positive)
A total of 16 sales stores in Migros, 16 Migros, 8 Migros Jet and 4 Macrocenter formats were put into service in March. As of the end of March, the company's total number of stores in Turkey is 2,598.Migros opened 25 net stores in March and 33 net stores in 1Q22.
Macro Agenda:
5 April: March Real Effective Exchange Rate
7 April: March Cash Budget Balance