EUR 10.00 For Business Accounts Only

TURKEY CONSUMER - A year of re-rating and growth

We look for a moderate recovery in consumer spending in 2020 on declining interest rates and improving consumer sentiment. Easing funding conditions should aid consumer spending initially but we need to see further improvement in macro-economic indicators such as unemployment rates for a further recovery in consumer spending. Meanwhile, we think improving funding conditions for companies and a possible credit rating upgrade for Turkey, should trigger a re-rating of stocks which are either leveraged and/or at the beginning of its capex cycle.

Given our robust outlook for domestic demand, persisting TRY volatility risk and a potential re-rating of consumer stocks in 2020, we prefer exporters that also benefit from a potential recovery in domestic demand and whose valuations are at a deep discount either to the own historical average or to those of peers. Hence, we prefer ULKER, TOASO, VESTL and CCOLA among consumer stocks we cover. Meanwhile, we downgrade BIZIM and MGROS to HOLD from Buy and DOAS to REDUCE from Hold due to demanding valuations.