Market Watch (Şeker Yatırım)

Market Watch - Wednesday, February 5, 2025

Outlook:
The BIST100 Index started Tuesday on a positive trend, ending the day amid mostly positive fluctuations at 9,807.10, up 0.33%. The Industrial Index gained 0.43% and the Banking Index climbed 2.22%. Following sales recorded at the start of the week, the BIST attempted to regain its losses yesterday. While the short-term technical outlook has weakened following recent sales, we believe that CPI data, which printed above expectations, plus the volatility in global markets, are also pressuring the BIST. Global markets, on the other hand, focused on tariff developments while the data agenda remained calm. After the tariff applications against Mexico and Canada were postponed and the markets found China's move measured, the U.S. stock markets recovered yesterday, led by technology stocks. European stock markets, excluding the U.K., also rose. This morning, the U.S. futures and German DAX futures are trading slightly negatively. Asian stock markets also have a mixed outlook. Today, services PMI data will be followed in Europe and the USA, and we expect the markets to continue closely following trade war developments. The VIOP30 Index completed the evening session up 0.16%. Locally, we expect the Benchmark Index to start Wednesday with limited reaction purchases and continue its rise if intraday profit-taking is met. SUPPORT: 9,750 - 9,650 RESISTANCE: 9,900 - 10,000.
Money Market:
The Lira was negative yesterday, weakening 0.03% against the USD to close at 35.9316. The currency also depreciated by 0.34% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were relatively flat. The ten-year benchmark bond yield fluctuated between a range of 27.46%-27.60%, closing the day at 27.59%, down 2 bps from the previous close.
Company News:
TSKB (TSKB.TI; OP) posted TRY3,099mn net income (+18% QoQ) in its 4Q24 bank-only financial statements. This is slightly above our TRY3,019mn call and the TRY3,031mn RT consensus estimate by 3% and 2%, respectively.
12M profit of TRY10,135mn also rose strongly by 44% YoY, the top-notch performance among the banks to have announced financials so far. 12M ROAE improved to 38.5% from 37.4% in 9M24, (Budget: ~40%), a peer-leading figure.
The main drivers of deviation from the estimated figures are: a positive surprise in trading loss, ECL and subsidiary income. Subsidiary income soared QoQ and boosted bottom line. The bank set aside TRY300mn of free provisions. Contrary to the trend seen in other banks, fee income fell by 15% quarterly. Trading loss hiked sharply by 62% quarterly to TRY354mn amid higher swap funding costs QoQ.
The bank management announced its budget for 2025 and expects a ROAE of ~30% (Seker: 30%).
1) Low 10% increase in loans (Seker: +11%),
2) Margin adjusted for swap costs: ~5% (Seker: Slight weakening),
3) Fee and commission income: ~CPI increase (Seker: +25%), Operating expenses: >Inflation (Seker: +30%),
4) Net CoR: <75bps, npl:=""><2.5% (seker:="" 160bps,="">
The bank's ~30% ROAE budget is consistent with our expectation of 30.3%. On the asset quality side, a <75 basis="" point="" cor="" budget="" is="" rather="" optimistic="" vs.="" our="" expectation="" of="" 160="" basis="">
There should be no major market reaction to the results. Our target price of TRY18.66 offers 35% upside potential. We model 12% YoY earnings growth for 2025E. We maintain our "Outperform" recommendation. The bank is trading at a 2025E P/E of 3.4x and P/BV of 0.92x (16% discount to domestic peers) with a ROAE of 30.3%.



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