Market Watch (Şeker Yatırım)

Market Watch - Wednesday, December 4, 2024

Outlook:
The BIST100 Index started Tuesday on a positive trend, continuing the course throughout the day to close at 9,827.23, up 1.51%. Although November's headline inflation was slightly above market expectations, the improvement in items other than unprocessed food, and continued expectations that the CBRT might start interest rate cuts in December due to the continued improvement in core inflation, supported the market's rise. There may be occasional profit-taking prompted by the expectation that the CBRT will start reducing interest rates. Yet, the uptrend at the BIST is expected to be maintained. Risk appetite in global markets weakened slightly yesterday in light of the political crises in France and South Korea. Yesterday, European and U.S. stock markets generally closed on a positive trend, except for the Dow Jones. This morning, Asian stock markets are generally traded negatively due to the influence of South Korea, while the U.S. and Dax futures are traded somewhat positively. The VIOP30 Index closed flat in the evening session. Locally, we expect the Benchmark Index to start Wednesday on a positive trajectory and seek to continue its rise if intraday profit sales are encountered. SUPPORT: 9,750 - 9,650 RESISTANCE: 9,950 - 10,100.
Money Market:
The Lira was negative yesterday, weakening 0.04% against the USD to close at 34.7405. The currency also depreciated by 0.27% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were positive. The ten-year benchmark bond yield fluctuated between a range of 29.36%-29.62%, closing the day at 29.38%, down 10 bps from the previous close.
Headlines:
*** CPI rises by 2.24% mom in November, while annual inflation is at 47.09%. As November inflation prints above expectations, the possibility of a December rate cut remains uncertain, albeit high… CPI increased by 2.24% mom in November, while annual inflation declined to 47.09% (previously 48.58%). Market expectations were for inflation to increase by 2% mom and 46.72% yoy (Seker Invest expectations were 1.98% mom and 46.7% yoy). Inflation, which printed above both our and the market expectations, has increased the risks regarding the monetary policy stance. The average of food, housing, and transportation inflation, which has a 56.5% weight in the index, rose by 48.22% yoy. Although inflation declined among certain items, the inflation felt especially for middle and low-income groups is beyond the headline figures. In the same period, monthly inflation in the Special CPI Aggregate B index (core inflation) was 1.54%, while annual inflation was realized as 45.68%. The monthly level of core indicators supports the disinflation outlook. Therefore, we can say that variables beyond the control of monetary policy are putting pressure on price levels. Producer prices, on the other hand, rose by 0.66% mom in November, while the annual change in PPI was realized as 29.47%. When we consider the sub-indices of PPI, annual changes in the main industrial groups were realized as a 29.40% increase in intermediate goods, 37.15% increase in durable consumer goods, 40.30% increase in non-durable consumer goods, 8.15% increase in energy, and 30.94% increase in capital goods. The long-lasting calm course of producer prices has been limiting the cost-driven consumer inflation. Therefore, we can say that the main uptrend in CPI inflation comes from unprocessed food or administered prices rather than producer prices and costs. Even under the current tight monetary policy, the course of consumer inflation is not at the targeted level. For price stability, monthly inflation needs to stabilize first below 2% and gradually within the 1.2-1.5% band. In the latest MPC decision, it was implied that the November-December inflation figures were critical in the projection of the interest rate cut. Looking at the actual November figures, it is understood that disinflation is not yet at the desired level. On the other hand, core inflation indicators, which could open the door to a rate cut, have fallen to the targeted level. Therefore, although the probability of a December rate cut is still high, it remains uncertain...
Sector News:
November 2024 Domestic Automotive Market Results: According to the domestic retail sales figures released by the Automotive Distributors and Mobility Association (ADMA), the automotive market for PCs and LCVs in November 2024 recorded a YoY increase of 5.3%, totaling 121,094 units (November 2023: 115,040 units). Retail sales of PCs increased by 3.5% YoY, rising from 91,424 units in November last year to 94,595 units this November. Retail sales of LCVs rose by 12.2% YoY from 23,616 units in November 2023 to 26,499 units this November. From January to November 2024, the automotive market for PCs and LCVs contracted by 0.5% YoY, dropping to 1,068,260 units (January- November 2023: 1,073,982 units). For the same period in 2024, retail sales of PCs showed a marginal increase of 0.5% from 840,925 units in the previous year to 845,530 units. In contrast, retail sales of LCVs experienced a decline of 4.4% from 233,057 units last year to 222,730 units this year. Tofaş's (TOASO.TI; OP) PC sales rose from 9,254 units in November 2023 to 9,641 units in November 2024, representing a YoY growth of 4.2%. Sales of PCs under the Fiat brand (sub-compact segment) rose by 7.1% YoY, totaling 9,194 units. Tofaş experienced a decline in LCV sales, which dropped by 45.4% YoY to 4,055 units (November 2023: 7,424 units). For the January to November 2024 period, Tofaş's PC sales decreased by 32.6% YoY, falling from 120,612 units in the same period of last year to 81,344 units. Retail sales of LCVs also declined by 23.0%, decreasing from 59,341 units last year to 45,715 units this year. Tofaş anticipates that total domestic market sales will range between 130,000 and 140,000 units in 2024. Ford Otosan's (FROTO.TI; OP) LCV sales surged by 118.5% YoY in November, reaching 8,680 units (November 2023: 3,973 units). However, during the January to November 2024 period, its retail sales of LCVs declined by 1.1% YoY, dropping from 63,760 units last year to 63,066 units this year. Ford Otosan expects total domestic market sales of between 105,000 and 115,000 units in 2024. Doğuş Otomotiv's (DOAS.TI; OP) PC sales increased from 13,693 units in November 2023 to 17,455 units in November 2024, marking YoY growth of 27.5%. LCV sales also experienced significant growth, rising by 80.4% YoY to 2,098 units in November 2024 (November 2023: 1,163 units). For the January to November 2024 period, Doğuş Otomotiv's retail sales of PCs rose by 5.0% YoY from 131,224 units last year to 137,806 units. Retail sales of LCVs also rose by 35.9%, climbing from 14,712 units in the same period last year to 19,988 units this year. Doğuş Otomotiv anticipates that total domestic market sales, excluding Škoda, of 125,000 units in 2024. In terms of market share, Doğuş Otomotiv's market share in November 2024 rose 3.2 pp YoY to 16.1%, while Ford Otosan's rose by 2.2 pp YoY to 8.7%. Tofaş's market share, on the other hand, declined by 3.2 pp YoY, falling from 14.5% in the same period last year to 11.3% (Slightly Negative for TOASO, positive for DOAS, & FROTO).
Company News:
Within the scope of its foreign borrowing program, Garanti BBVA (GARAN.TI; OP) has obtained a syndicated loan consisting of two tranches of USD244mn and EUR162.4mn (Total: USD415mn), with a maturity of 367 days, in line with the Sustainable Debt Financing Framework, for the first time this year. The rollover rate is 100%. (AKBNK: 124%, YKBNK: 160%). Total costs fell by 175 bps compared to the November 2023 loan to Sofr+1.75% and Euribor+1.50%, respectively.




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