Turkey Wake up call: Macro, Political and Equity News, 15th April

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Wake – up call

BIST climbed 2.23% yesterday as the recent uptrend was resumed after the small breather on Monday. Index opened gap higher at 97.5k mark and remained in an 800-point range until around 4:30PM when the market gained further traction to close near its daily peak. Banks again lagged the broader market with the banking sector index adding 1.00% amid some pressure on AKBNK and VAKBN while TSKB outperformed. Aviation stocks, Koza Group names, ASELS, KCHOL, ARCLK, and VESTL were among the non-financials that spearheaded the broader market while ENKAI, DOAS, and GUBRF stood out as rare decliners. Today, our local macro agenda involves TurkStat's residential sales data for March’20 at 10AM local time. Home sales had surged 51.4% yoy in February to 118.8k units on base effects as well as the 391.9% jump in mortgage-backed transactions that surged for the sixth month in a row after the monthly mortgage loan rates had been trimmed to advantageous levels below 1%. Separately, March'20 central government budget numbers will be released at 11AM. BIST seems off to a sideways start with a positive bias amid mixed signals from abroad. Major U.S. indices added 0.9-1.1% from the hour we left, but S&P futures are down 0.6% in early trades while Asian markets present a mixed picture. Lira is still weak with the USDTRY at 6.8218 vs 6.8122 at yesterday's closing bell.
Macro and Political News:
(=/-) Number of deaths from coronavirus reached 1403... According to the Health Ministry, the number of deaths from coronavirus increased by 107 people yesterday and reached 1403. The total number of tested and infected people are 443,626 and 65,111 in Turkey.

(=) Agri PPI advanced by 1.9%... According to the data released by TURKSTAT, the PPI for agri sector advanced by 1.9% MoM and 10.4% YoY in March 2020.

(+) Bosch will invest TL500mn in Turkey... Industry and Technology Minister Mustafa Varank announced that Bosch will invest TL500mn additional investment in order to produce new generation high-pressure pumppresses in its facility in Bursa province, as Bosch Turkey will receive the Government incentive for that project.

(-) IMF expects 5% contraction in Turkish economy in 2020E... IMF released its World Economic Outlook report yesterday. Accordingly, the IMF reduced the global GDP growth forecast for 2020E to minus 3% from 3.3% growth, while increasing 2021E GDP growth to 5.8% from 3.4%. For Turkey, IMF expects 5% YoY contraction in Turkey’s GDP in 2020E and 5% YoY recovery in 2021E. IMF forecasts 0.4% current account balance / GDP for 2020 and 12% CPI.

(=/+) Valuera Energy continues its production in Turkey... Canadian Valuera Energy stated that the company continues the oil and gas exploration works in Thrace region of Turkey despite weakening economic activities due to covid-19. The company released that the average production in 1Q20 advanced by 9% YoY and revenues improved by 6% YoY in 1Q20.

(=) TWF to invest strategically-important private companies... The ruling Ak Parti proposed a new draft law to the Parliement including that Turkish Wealth Fund will be allowed to invest in strategically-important private companies which are having financially difficult times.

(=) MASAK regulation update… Financial Action Task Force (FATF), an international establishment to prevent criminal financing called for close monitoring of online financial transactions to the international financial authorities community. Accordingly, Financial Crimes Investigation Board of Turkey (MASAK) made an announcement to the banks to declare TRY1.00mn equivalent or higher amounts of foreign exchange transfers to abroad will be reported 1 day earlier than the regular time.


Sector and Company News:

(=) PGSUS’ CEO Mehmet Nane bought 10k lots of PGSUS shares at TL55.2 per share.

(-) PGSUS posted 1.34mn passenger traffic for March 2020, down by 44% YoY (to 1.34). In March, domestic passengers carried were down by 36% YoY (to 0.87mn), while international pax were down by 54% YoY (to 0.47mn). Load factor in March retreated by 7500bps YoY to 79.8%. With March data, PGSUS’ total pax were down by 9.5% to 6.25mn and load factor stayed almost flat YoY at 86.8% in 1Q20.

(=) ISCTR bought 2.15mn lots of SISE shares with TRY4.68 – 4.71 price range per share. Its share in SISE reached to 68.50% by this transaction.