Turkey Wake up call: Macro, Political and Equity News, 9th April

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Wake – up call

BIST climbed 0.91% yesterday, extending its winning streak to the fifth day. After an indecisive start and some wobble in early hours, benchmark BIST100 started a gradual ascent after noontime to a close near its intraday peak. Banks slightly underperformed the broader market amid the 0.72% increase in their sector index with AKBNK leading and VAKBN lagging. TTKOM, TCELL, PGSUS, KCHOL, MAVI, TTRAK, YATAS, and Koza Group names topped the non-bank gainers while EREGL, KRDMD, TOASO, FROTO, SAHOL, and CCOLA were among the weak spots. Today, our local macro agenda is again muted. We foresee another positive open for the BIST thanks to the 2.1-2.2% overnight gains in main U.S. indices after the hour we left while S&P futures are down a few points in early trades this morning. Asian markets outside of Japan are mostly in the green while lira is a bit weaker with USDTRY at 6.7744 vs 6.7609 at yesterday's closing bell.
Macro and Political News:
(=) Number of deaths from coronavirus reached 812... According to the Health Ministry, the number of deaths from coronavirus increased by 87 people yesterday and reached 812. The total number of tested and infected people are 247,768 and 38,226 in Turkey.

(=) Details of 62-article omnibus bill... The Ministry of Labor has prepared an ombinus bill and shared it with non-governmental organization in order to offer for consideration. The key articles are i) lay off employees within next three months will be banned and the employers have right to leave employees unpaid yearly furlough. In their unpaid leave, the employees will be paid TL39.24/daily from the unemployment fund. ii) The dividend pay out ratio from 2019 earnings will be limited by 25% and the company boards are not allowed to pay dividend advance in 2020.

(=) Erdogan’s statement on Covid-19 threat... According to daily Hurriyet, President praised the nation’s “healthcare army” of nearly half a million medical staff and 360,000 support personnel fighting the coronavirus outbreak. “No virus, no outbreak is stronger than Turkey,” said Recep Tayyip Erdogan in a letter addressed to the Turkish people who are older than 65 and restricted from leaving their homes due to pandemic. On Wednesday, Turkey began distributing face masks and cologne, a traditional ethanol-based scented disinfectant, for people in the risk groups, including 65-year-plus and people suffering from chronic illnesses. Presidend Erdogan added that Turkey is one of the countries best prepared for the outbreak thanks to civil service reforms made over the last 18 years.

(-) Diesel prices hiked by ~3%... Diesel retail prices have been hiked by TL0.15, which will be effective as of today. The diesel prices is expected to be at ~TL5.50 per liter (differs from region to region)

(=) Third patrol in Idlib... Turkish defense minister announced that Turkey and Russia conducted third joint patrol in Idlib, following the cease-fire since March 5th.

(=/+) Construction materials exports advanced by 5.1% in Feb20... According to the data released by IMSAD, the exports of construction materials improved by 5.1% YoY to USD1.7bn in Feb20.

(=) Statements of SAW terminal management CEO... Sabiha Gokcen Airport’s terminal management company’s CEO Mr. Goral had an interview and stated that there will be no layoffs if the air traffic resumes in late May20. The CEO also said that the second runway will be online in Nov20 but the second terminal investment will be delayed to 2021. On top of that, he also stated that they may consider stake sale of terminal management company after the markets normalize.

(-) The football league broadcaster will not pay until the league restarts... According to the daily Dunya, the football league broadcaster stated that the broadcasting payments to the football clubs has been delayed to the date when the football league restarts. Recall that the broadcaster will have TL600mn payment to the clubs during the course of the league.

(+) The Defense Minister’s statement on medical equipments... The Defense Minister stated that Turkey is ready to produce 3.5-4.0mn masks and 105mn medical coveralls weekly and the production capacity of masks will be increased to 10mn units next week.

Sector and Company News:

(=) ISCTR bought 5mn lots of SISE shares with TRY4.21 – 4.31 price range per share. Its share in SISE reached to 67.84% by this transaction.

(-) Automative sector… Inan Ekici, the Chairman of the Board of Car Rental Organizations Association (TOKKDER) said that due to a significant decrease in flights and airline passenger numbers, there was more than 50%contraction in short-term/daily car rental business volume, which is directly dependent on airline passenger numbers.