Daily Market Watch 25/02/2014. Market Commentary. Headlines & Macroeconomic News. Industry News. Corporate News & Trading Ideas. Calendar.

Transcription

1 Baslık Daily Market Watch 25/03/2014 Market Commentary Fresh concerns on Chinese economy and lingering uncertainty over Ukraine cast a shadow over global equity markets. Chinese PMI reading for March (48.1) felling for a fifth consecutive month to its lowest level since July last year raised worries on global outlook. Wall Street and European bourses could not escape from the selloff despite relatively strong March PMI readings pointing to a gradual recovery. As a high beta play Borsa Istanbul was one of the worst performers in EM league. Fitch report screening Turkish Corporates as one of the most vulnerable ones in a crisis scenario in the EMEA region accelerated the pace of the selloff in Turkish equities. Bank shares were the key losers of the day amid a selling spree in the belly of the yield curve. There are no market moving news flow in the local markets. Real sector confidence index and capacity utilization figures for March are the only economic readings in the market. On the global front, industrial confidence in Eurozone and consumer confidence in US are key readings to watch. We expect a flat opening in Turkish equities today with bargain hunters buying. Recovery in Turkish lira and European futures also support some reactionary buying in markets. Recovery in the market would be limited as İnvestors are likely to remain cautious with speculations of another market moving leaks-flow just before the elections. Headlines & Macroeconomic News Fitch screened Turkish Corporates as one of the most exposed ones in the EMEA region in the face of a crisis scenario. Industry News More than 10 bids were collected for Israeli Gas Field Export Tender to Turkey Corporate News & Trading Ideas BIMAS TI: ODAS TI: Calendar BIM decided to halt its share buy back programme as the share price became stable ODAS Enerji is expected to announce the details of the plan regarding Can Coal Reserve. Local Calendar 25/03/2014 Real Sector Confidence Index and Capacity Utilization Ratio - March - Time 14:30 Global Calendar Exp. Pri. 25/03/2014 FR:Own-Company Production Outlook -- 9 FR:Production Outlook Indicator UK:Retail Price Index Time:11: UK:RPI Ex Mort Int.Payments (YoY) -- 2,8% US:House Price Index MoM Time:15: ,8% US:S&P/CS Composite-20 YoY -- 13,42% US:Richmond Fed Manufact. Index US:New Home Sales Time:16: K US:New Home Sales MoM Time:16: ,6% Please refer to important disclaimer at the end of this report. Market Figures Close Daily 1M BIST-100, TRY 63, % -0.3% Trading Vol., TRM mn 1,969-20% -15.6% MSCI EM Free % -0.6% MSCI Turkey % -1.9% TRLIBOR, 3M% bps 65 bps Benchmark Bond bps #N/A Eurobond bps 20 bps US$/TRY % 1.8% EUR/TRY % 0.0% BIST 2014E P/E 9.44% BIST 2015E P/E 8.43% MSCI Emerging Market Indices, in US$ terms /02/ /02/ /03/2014 MSCI EM Turkey 11/03/ /03/2014 MSCI EM MSCI Sector Indices Best/Worst Performers Best 5 Daily Worst 5 Daily Softw r&srvcs 1.8% Airlines -0.7% Tel. Svc. 1.4% Transport Ind. 0.2% Consumer Discr. 1.4% Cons. Staples 0.2% Retail Index 1.3% Semiconductors 0.2% Banking 1.3% Utility 0.4% BIST-100 Best / Worst Performers Best 5 Daily Worst 5 Daily IHEVA 10% PRKME -7% ITTFH 7% IZMDC -6% FENER 6% CLEBI -5% BJKAS 2% TEKST -5% CCOLA 1% IPEKE -4% BIST-100 Top 5 by Trading Volume Ticker Close Daily Vol. (TRY mn) GARAN % 298 HALKB % 211 AKBNK % 110 THYAO % 101 VAKBN % 96 1

2 Headlines & Macroeconomic News Fitch screened Turkish Corporates as one of the most exposed ones in the EMEA region in the face of a crisis scenario. The leverage ratio of the Turkish companies escalates 1.5 times in a scenario where currency depreciates 15%, interest rates rise 250bps and foreign borrowing costs increase. The stress scenario does not affect the rating and it only reflects the vulnerability of the companies in a more distressed operating environment. Fitch country rating review is set to be on April 4 th, Industry News More than 10 bids were collected for Israeli Gas Field Export Tender to Turkey According to daily Hurriyet, there were more than ten bids that were submitted in the tender by the partners in Leviathan natural gas field in Israel for the export of natural gas to Turkey. Zorlu Group, Turcas Petrol and German based RWE are among the bidders. Note that Zorlu Enerji has already become one of the key players in Israel s energy sector. A natural gas based power plant investment with a total installed capacity of 800MW, in which Zorlu Enerji has a 25% stake, is expected to be operational in 2Q2014. In addition, the company has two natural gas based power plants investments with a total installed capacity of 175MW. The company holds 42% stake in these projects. These projected are expected to be operational by the end of

3 Corporate News & Trading Ideas BIM BIM decided to halt its share buy back programme as the share price became stable The BoD of the Company decided to stop the share buy back programme three months before the announced schedule, which started on December 27, BIM purchased 533,624 shares at a total value of TL20.3mn during this period within price range of TL According to the share buy back programme the upper share price limit was set at TL40 and the total amount of the purchases would not exceed TL200mn within 6 months. Neutral. Odas Elektrik Uretim BIMAS TI UP -2% Upside (TRY) Current Target Price Mcap, mn 13,753 13,453 FF Mcap, mn 8,968 8,773 (x) 2014E 2015E P/E P/BV EV/EBITDA (TRY) 1M YtD Avg. Vol. Mn Relative Perf. % akumbaraci@isyatirim.com.tr ODAS Enerji is expected to announce the details of the plan regarding Can Coal Reserve. ODAS Enerji will hold its AGM on 31st of March. The company had stated that the management will share its plans and details regarding Can Coal Reserve before its AGM. We expect the company to announce the details such as the capacity and the investment cost towards the end of the week. ODAS TI NR (TRY) Current Target Price 4.06 Mcap, mn 171 FF Mcap, mn 48 (x) 2014E 2015E P/E P/BV EV/EBITDA (TRY) 1M YtD Avg. Vol. Mn Relative Perf. %

4 Currency The greenback traded lower against most major currencies after the release of lower than expected US manufacturing PMI. Meanwhile, downplaying of Russia-Ukraine crisis helped the euro. As a result, most emerging market currencies started the week stronger against the greenback. By falling 0.12% against the dollar, Turkish lira continued to underperform EM average ahead of March 30 local elections. In the early morning hours, TL trades flat against the dollar at 2.237, the euro at Real sector confidence index and capacity utilization ratio will be today s main local update. On the US front, markets will follow house price index, S&P/CS composite, Richmond Fed manufacturing index and new home sales data. Local Bills and Bond Rate market continued to stay under sell-off at the week start as markets tried to anticipate the outcome of March 30 municipal elections. Yields were up by 12bps on the belly and 12bps on the long-end of the curve. Today, we expect a flat opening on the back of flat currency and neutral global risk sentiment. The 2yr benchmark (TRT240216T10) ended the day 12bps up at 11.60% comp. Eurobonds On the first business day of the week, the main releases came from Europe. Euro area PMI figures were closely followed. The PMI Manufacturing index was down to 53 in March, while PMI services came down at 52.4, both in line with expectations. European 10-yr notes rallied on the day, while US 10-yr notes remained relatively steady on the day. F/X Data Change (%) As of 21/03/2014 Close Daily YTD US Dollar Euro Euro/US Dollar Equal Weighted Basket Source: Bloomberg 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% TRY Daily Performance Against US Dollar(%) CZK HUF KZT PLN RON RUB 0.2 Mil TL Daily Volume 24/02* yrs % UAH 2-5 yrs TL Yield Curve ZAR CNY INR FRN Coupon Zero Bill ARP BRL Currencies: Turkey: TRY, Çzech Rep.: CZK, Hungary:HUF, Kazakhstan:KZT, Poland:PLN, Romania:RON, Russia:RUB, Ukraine:UAH, S.Africa :ZAR, China:CNY, India:INR, Argentina:ARP, Brazil:BRL Bill Coupon Zero US 10-yr notes continued to trade around the same level as Friday at 2.75% and are slightly down this morning at 2.73%. Turkish eurobonds continued to be sold-off on Monday. Yields were up by 10bps on the belly and 3-7bps on the long-end of the curve. Turkish 5yr CDS spread trade 9bps wider at 266bps. Recommendations Local Rates: We downgraded our BUY call for long-term CPI linker notes to OW. We downgraded our BUY call for medium term CPI linkers to HOLD. We upgraded our HOLD call for long term fixed coupon notes to OW. Deposits versus short notes: We recommend deposits against shortterm notes as the decline in short-term yields was not followed by deposit rates Month 4

5 Most Traded Local Bonds & Bills Rating Disclosure: Is Investment s ratings for the listed stocks are Outperform, Market Perform and Underperform, which are all benchmarked with the expected return of the Istanbul Stock Exchange (BIST 100). All these ratings are independently assigned by Is Investment equity analysts based on company s estimates which pertain to future earnings, cash flow and balance sheet of the company. Additionally, analysts may put the stocks Under Review on a temporary basis if conditions do not allow or restrict to make a proper assesment of the company. Investment Ratings for each individual company are assigned in accordance with the following criteria, i-) Outperform is assigned when the company s total expected return exceeds the target index return by 5% points ii-) Underperform is assigned when the company s total expected return remains 5% points under the target index return, iii-) Market perform is assigned when the company s total expected return remains higher than the target index return -5% points, yet below than the target index return +5% points. This report has been prepared by İş Yatırım Menkul Değerler A.Ş. (İş Investment) solely for the information of clients of İş Investment. Opinions and estimates contained in this material are not under the scope of investment advisory services. Investment advisory services are given according to the investment advisory contract, signed between the intermediary institutions, portfolio management companies, investment banks and the clients. Opinions and recommendations contained in this report reflect the personal views of the analysts who supplied them. The investments discussed or recommended in this report may involve significant risk, may be illiquid and may not be suitable for all investors. Investors must make their decisions based on their specific investment objectives and financial positions and with the assistance of independent advisors, as they believe necessary. The information presented in this report has been obtained from public institutions, such as Borsa Istanbul (BIST), Capital Market Board of Turkey (CMB), Republic of Turkey, Prime Ministry State Institute of Statistics (SIS), Central Bank of the Republic of Turkey (CBT); various media institutions, and other sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed. All information in these pages remains the property of İş Investment and as such may not be disseminated, copied, altered or changed in any way, nor may this information be printed for distribution purposes or forwarded as electronic attachments without the prior written permission of İş Investment. ( This research report can also be accessed by subscribers of Capital IQ, a division of Standard & Poor's. For more information, please visit Capital IQ's web site at 5