Turkish Lira and equities both had a volatile day, with Lira depreciating 6% against USD at one point. The intra-day volatility of Lira continues to be very high to be palatable for anyone doing business, trying to calculate costs or set pricing after last week’s sudden drop.
The December inflation expectation survey is out and the divergence between the min. and max. is 900bps, the widest it has ever been.
Bond yields continue to be very high, 2 years above 23% and 10-years above 24%, as the rate cut cycle of the CBRT is as far away from effective on any other market interest rate as possible.
YKB was the best performing bank yesterday as it stands out the be the biggest benefactor of higher inflation with the largest CPI linker portfolio.
Company news:
*ARCLK TI > Arcelik received a total of EUR 37.2mn in dividends from its subsidiaries. This transaction has no impact on the consolidated financial statements. <neutral> Grundig Multimedia B.V., and Ardutch B.V., which are subsidiaries of Arçelik in Netherlands, have decided to distribute a dividend of EUR 19.2mn and EUR 18mn to Arçelik A.Ş., respectively. A total of EUR 37.2mn dividend was collected as of December 27, 2021 and has no effect on Arçelik’s consolidated financial statements.
*PETKM TI> announced that 3rd installment (US$240mn) of stake purchase agreement regarding the STAR refinery has been postponed from Jan’22 to Dec’22. (neutral) Due to the uncertainty in global petrochemical industry, main periodic maintenance at plants of Petkims which are planned to be carried out in 4Q22 and Petkim's strategy on reducing its current indebtedness through repayment of certain part of its loans within the period of 2021-2022, Petkim postponed its 3rd installment (US$240mn) of stake purchase agreement regarding the STAR refinery to Dec'22 from Jan’22.
*CCOLA TI> acquired a 42.9% stake in CCBU for US$90mn equity value. <Positive> Analyst Comment: On 30 September 2021, CCOLA completed the acquisition of 57.1% stake in CCBU for US$252.3mn equity value based on US$430mn enterprise value. With this new acquisition, we calculate CCOLA acquired remaining 42.9% stake in CCBU for US$90mn equity value based on US$198mn enterprise value. In 2020, CCBU net sales and EBITDA were <s>US$170mn and </s>US$29mn respectively. In 9M21, CCBU net sales and EBITDA were <s>US$169mn and </s>US$24mn respectively. We will start seeing CCBU’s effect on CCOLA’s financials in 4Q21. CCOLA’s acquisition of 57.1% of CCBU implied 14.9x EV/EBITDA based on 2020 numbers. CCOLA’s acquisition of 42.9% of CCBU implies 6.8x EV/EBITDA based on 2020 numbers. Overall, we calculate CCOLA paid 11.4x EV/EBITDA based on 2020 numbers for 100% of CCBU. Global bottlers are currently trading at ~7.5x 1-year forward EV/EBITDA. We believe CCOLA struck a bargain in the second part of the deal while paying a slight premium for overall deal. We rate this news as “Positive”.
*BIMAS TI> bought back 100K shares at an average price of TL64.55 on 27 Dec 2021. Since 6 Dec 2021, the total number of shares bought back reached 2.6mn at an average price of TL70.91.
*SAHOL TI> bought back 250K shares at an average price of TL13.47 on 27 Dec 2021. Since 09 Nov 2021, the total number of shares bought back reached 6.0mn at an average price of TL13.62.
Weekly Agenda:
Dec 27: December real sector confidence utilization
Dec 31: November trade balance (consensus -USD5.3bn)