reports
- Egor Fedorov
- James Wilson
- Oleksiy Soroka
- CFA
EM Credit Spark/EM credit weekly
Markets were calmer last week as investors continue to look towards potential rate cuts in the US in September. Chair Jerome Powell at his Jackson Hole speech on Friday, 23 August, sent strong signals that the Fed is ready to cut key rates. “The time has come for policy to adjust. The direction of travel is clear". Markets now price up to 100bp in US key rates cut till the end of the year and a further 125bp of cuts next year. We view the macro backdrop as supportive for EM credit, while new sup...
YKBNK YAPI VE KREDI BANKASI A.S.
ISCTR TURKIYE IS BANKASI ANONIM SIRKETI CLASS C
PUMA PUMA ENERGY ZAMBIA PLC
AKBNK AKBANK TAS
103M SASOL LIMITED
QNBFB QNB FINANSBANK A.S.
TSKB TURKIYE SINAI KALKINMA BANKASI AS
TTRAK TURK TRAKTOR VE ZIRAAT MAKINELERI A.S.
VAKBN TURKIYE VAKIFLAR BANKASI TURK ANONIM ORTAKLIGI
19XX NEPI ROCKCASTLE N.V.
- Oleksiy Soroka
- CFA
Turkish bank sector update/Moving forward
We believe that Turkish banks passed the lowest point of the year in terms of net interest margins (NIM) in 2Q24. With some aspects of full-year guidance tweaked after the first-half reporting season, we now expect these banks' performance to be broadly in line with the updated FY24 targets.
- Oleksiy Soroka
- CFA
YKBNK YAPI VE KREDI BANKASI A.S.
ISCTR TURKIYE IS BANKASI ANONIM SIRKETI CLASS C
AKBNK AKBANK TAS
QNBFB QNB FINANSBANK A.S.
TSKB TURKIYE SINAI KALKINMA BANKASI AS
VAKBN TURKIYE VAKIFLAR BANKASI TURK ANONIM ORTAKLIGI
ZRGYO ZIRAAT GAYRIMENKUL YATIRIM ORTAKLIGI AS
- Duygun Kutucu
Turkish Banking Sector
We anticipate that the relaxation of the regulatory framework and a return to more conventional policies will positively impact the banking sector. TL commercial loan/deposit spreads (front book), which had plummeted to as low as -18% by the end of June, have reached 6.6%, thanks to the removal of a cap on lending rates and lower deposit rates. Taking these favourable developments and strong 2Q23 results into account, we are raising our aggregate FY23 NI estimate for the sector by 10%. We now fo...
- Egor Fedorov
- James Wilson
- Oleksiy Soroka
- CFA
- Egor Fedorov
- James Wilson
- Oleksiy Soroka
- CFA
EM Credit Spark/EM credit weekly and bank sector update
While key central bank meetings passed this week without any major upset, the short-term outlook for EM is likely to be driven by global risk factors such as US banking system concerns and the debt ceiling. Spread widening could open up value given expectations for a more supportive medium-term backdrop.
- Egor Fedorov
- James Wilson
- Oleksiy Soroka
- CFA
EM Credit Spark/EM credit weekly update
With signs of some stabilisation in global markets, EM credit performed well this week. We see potential for the positive momentum to be sustained in the near term, with spreads still at elevated levels and EM nations largely insulated from recent banking stresses.
- Egor Fedorov
- Oleksiy Soroka
- CFA
EM Credit Spark/EM credit weekly update: trade ideas review
Buying opportunities in EM bonds? Yes, if you believe the key rates hiking cycle is soon at its end… Next week we hope the volatility amplitude will calm down following contained stress in financial markets caused by recent troubles in the US and EU banking systems, emergency actions and further tightening of monetary conditions. EM credit spreads technically widened recently, and cautious demand emerged. In this report we review our trade ideas we made before the storm started.
- Duygun Kutucu
Vakifbank 3Q22 Results Review
3Q22 NI in line with our estimate: Vakifbank reported bank-only net income of TL5.59bn in 3Q22 (-20% q/q) (RoE: 26.1%), in line with our forecast of TL5.48bn and higher than the consensus estimate of TL4.90bn. Net income would exceed our forecast if the bank did not set aside TL5.5bn free provisions , rather thanTL5.0bn included in our numbers, thanks to lower than expected loan loss provisions. As such, net income in 9M22 reached TL15.6bn (29.2% RoE), vs. TL2.2bn in 9M21. The management retaine...
- Research Team
The Rear-View Mirror – EME markets: Turkish stocks outperform in Augus...
EME Equity Market – August 2022 Market performance – Turkey the biggest winner, in a predominantly bad month. The MSCI EM Europe Index declined 1.2% mom in EUR and 2.8% mom in USD terms. Turkey’s ISE index outperformed all other indices, adding 24.9% mom in EUR terms and 25.1% in local currency terms. Hungary’s benchmark, the BUX Index, added 1.1% mom and 0.2% mom in EUR and HUF terms, respectively. Greece’s ASE Index had a muted performance and added only 0.6% mom. All the other indices across ...
GARAN TURKIYE GARANTI BANKASI ANONIM SIRKETI
OPAP GREEK ORGANISATION OF FOOTBALL PROGNOSTICS SA
EXAE HELLENIC EXCHANGES SA
TCELL TURKCELL ILETISIM HIZMETLERI A.S.
MOL MOL NYRT
EBS ERSTE GROUP BANK AG
CEZ CEZ AS
PETG PETROL D.D.
ACP ASSECO POLAND SA
HTO HELLENIC TELECOMMUNICATIONS ORGANIZATION SA
RBI RAIFFEISEN BANK INTERNATIONAL AG
COG COGNOR HOLDING SA
ISCTR TURKIYE IS BANKASI ANONIM SIRKETI CLASS C
KOMB KOMERCNI BANKA A.S.
TITK TITAN CEMENT CO. SA
ALK ALKALOID AD SKOPJE
BHW BANK HANDLOWY W WARSZAWIE S.A.
BIMAS BIM BIRLESIK MAGAZALAR A.S.
WIZZ WIZZ AIR HOLDINGS PLC
PZU POWSZECHNY ZAKLAD UBEZPIECZEN SPOLKA AKCYJNA
DOAS DOGUS OTOMOTIV SERVIS VE TICARET A.S.
BSK ING BANK SLASKI S.A.
MTELEKOM MAGYAR TELEKOM TELECOMMUNICATIONS
CAI CA IMMOBILIEN ANLAGEN AG
PKN POLSKI KONCERN NAFTOWY ORLEN S.A.
MYTIL MYTILINEOS S.A.
AEFES ANADOLU EFES BIRACILIK VE MALT SANAYII A.S.
ASELS ASELSAN ELEKTRONIK SANAYI VE TICARET A.S. CLASS B
BRISA BRISA-BRIDGESTONE SABANCI LASTIK SANAYI VE TICARET A.S.
EREGL EREGLI DEMIR YE CELIK FABRIKALARI T.A.S.
CCC CCC SA
CCOLA COCA-COLA ICECEK A.S.
VESBE VESTEL BEYAZ ESYA SANAYI VE TICARET
GTC GLOBE TRADE CENTRE S.A.
AUG1L AGROWILL GROUP AB
TTKOM TURK TELEKOMUNIKASYON A.S.
ENA ENEA S.A.
BFT BENEFIT SYSTEMS S.A. ALLOTMENT
MGROS MIGROS TICARET A.S
PGE PGE POLSKA GRUPA ENERGETYCZNA S.A.
LVC LIVECHAT SOFTWARE SA
TBCB TBC BANK JOINT STOCK CO
TPEIR PIRAEUS BANK SA
PPC PUBLIC POWER CORPORATION S.A.
OTP OTP BANK NYRT
PPA PIRAEUS PORT AUTHORITY S.A.
AYGAZ AYGAZ A.S.
THYAO TURK HAVA YOLLARI A.O.
TUPRS TURKIYE PETROL RAFINERILERI A.S.
EUR EUROCASH S.A.
VAKBN TURKIYE VAKIFLAR BANKASI TURK ANONIM ORTAKLIGI
GSPARK GRAPHISOFT PARK SE
TKFEN TEKFEN HOLDING
CPS CYFROWY POLSAT SA
POSR POZAVAROVALNICA SAVA
GPW WARSAW STOCK EXCHANGE
11B 11 BIT STUDIOS S.A.
TPE TAURON POLSKA ENERGIA S.A.
DAT DATAWALK SA
ALR ALIOR BANK SA
OTOEL AUTOHELLAS S.A.
BANK OF CYPRUS PCL
WPL WIRTUALNA POLSKA HOLDING SA
SAB1L SIAULIU BANKAS
BRD BRD-GROUPE SOCIETE GENERALE
TLV BANCA TRANSILVANIA S.A.
MONET MONETA MONEY BANK AS
SNG SOCIETATEA NATIONALA DE GAZE NATURALE ROMGAZ SA
H4L1 HALYK SAVINGS BANK OF KAZAKHSTAN GDR
BNET BITTNET SYSTEMS
PBK PATRIA BANK SA
HMX1R HANSAMATRIX AS
DIGI DIGI COMMUNICATIONS NV
DNP DINO POLSKA S.A.
COTE CONPET SA
SNN SOCIETATEA NATIONALA NUCLEARELECTRICA SA
TEL C.N.T.E.E. TRANSELECTRICA
ELSA SOCIETATEA ENERGETICA ELECTRICA
FP. FONDUL PROPRIETATEA S.A. GDR (REG S)
BVB S.C. BURSA DE VALORI BUCURESTI S.A.
GEB BANK OF GEORGIA
TGN SOCIETATEA NATIONALA DE TRANSPORT GAZE NATURALE TRANSGAZ S.A.
19XX NEPI ROCKCASTLE PLC
ALPHA ALPHA BANK
M MED LIFE
ELPE HELLENIC PETROLEUM
PTKHY PETKIM PETROKIMYA HOLDING AS
IIA IMMOFINANZ AG
SOKM SOK MARKETLER TICARET AS
EAT AMREST HOLDINGS SE
ZB-R-A ZAGREBACKA BURZA DD
NLBR NLB GROUP
ENJSA ENERJISA ENERJI
SF3 STS GROUP AG
KAP NATIONAL ATOMIC COMPANY KAZATOMPROM
ADKO ADDIKO BANK
PEN PHOTON ENERGY NV
FINT MINING AND METALLURGICAL COMPANY NORILSK NICKEL (GDR)
ILRA-R-A FINTEL ENERGIJA
ALG ILIRIJA D.D.
DUNAHOUSE ALLEGRO.EU SA
TNB DUNA HOUSE
WINE NLB BANKA
4IG ALRO SLATINA
IGN1L PURCARI WINERIES PCL
ONE 4IG NYRT
KLKIM IGNITIS GRUPE
ONE UNITED PROPERTIES SA
KALEKIM KIMYEVI MADDELER SANAYI VE TICARET AS
- Egor Fedorov
- Oleksiy Soroka
- CFA
EM Credit Spark/Isbank, Vakif, CCI, and a Turk Telekom trade idea
Isbank (-/B3/B-) reported net income of TRY22,972m in 1H22, up 467.3% YoY, and TRY14,540m in 2Q22, up 72.4% QoQ. Vakif (-/B2/B-) reported net income of TRY10,019m in 1H22, up 610.3% YoY, and TRY7,016m in 2Q22, up 133.7% QoQ. Coca-Cola Icecek AS (BBB-/-/BBB-; Net Debt/ EBITDA ratio: 1.03x) reported 2Q/6M22 financial results on Tuesday, 9 August. Turk Telekomunikasyon AS (B+/-/B; Net Debt/ EBITDA ratio: 1.43x) published 2Q/6M22 financial results on Monday, 8 August.
- Duygun Kutucu
Vakifbank 2Q22 Results Review
2Q22 NI in line with our estimate: Vakifbank reported bank-only net income of TL7.02bn in 2Q22 (+134% q/q) (RoE: 36.0%), in line with our forecast of TL7.21bn and higher than the consensus estimate of TL6.66bn. While loan loss provisions were higher than our estimates, this was offset by lower-than-expected tax expense. As such, net income in 1H22 reached TL10.0bn (30.3% RoE), vs. TL1.4bn in 1H21. We revised our FY22 NI estimate to TL30.7bn from TL33.8bn as we incorporate high provision expe...
- Duygun Kutucu
Turkish Banking Sector
We anticipate net earnings growth of 304% for the banks in our coverage in 2022, driven by higher CPI linker income, which translates into an average ROE of 41%. While this level of ROE has not been seen in recent years, we believe it is more accurate to look at the ‘real’ return on equity, rather than the nominal level, considering the high inflation level. We expect CPI to end the year at 57%, and a return below inflation therefore means a contraction in banks’ equity in real terms. While ther...
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