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Turkish Markets while you were asleep (09/08/2011)

|Includes:TKC, TKF, iShares MSCI Turkey ETF (TUR)

The stock market (XU100) closed the first session up 1.15%. Turkcell, (NYSE:TKC), (up 3.7%) was one of the main large cap winners as well as Akbank, (OTCQX:AKBTY), (2.2%). There is also some movement in fertilizers as Ege Gubre was up nearly 7%, followed by Gubre Fabrikalari following newspaper reports over the past 2 days suggesting price increases of 50%+ 

Turkish Deputy Prime Minister Babacan (ex economy minister) said that the government expects 2011 growth to be around 6% (but expects a potential revision in the coming months) while arguing inflation target of 5% could be achieved. Also mentioned that Turkey is now experiencing inflation due to strong domestic demand but finds the risks of a slowdown (and even a 2009-like contraction) more threatening.


Economy minister said Q2 GDP growth expectation is 7.5%. He also mentioned that the government’s long term target growth rate is 7%  (Note how this contrasts with the 2011 year end expectations by Deputy PM)


Citi expects stronger profitability of companies in the coming year and said that it is time for to buy Turkish stocks once again. They are buyers of TOFAS, Bizim Toptan, TAV Havalimanlari (OTCPK:TAVHY), TEKFEN Holding (OTCPK:TKFHY), Garanti (OTCQX:TKGBY) and Yapi Kredi Bank.


Passenger car and light commercial vehicle sales were down 5% ytd in August compared to the same period in 2010. The deceleration is getting faster as July ytd contraction was 2.5%


Banking Sector data show that ytd profitability compared to the same period a year ago is down 11.7% (note that banking & finance makes up nearly 50% of the stock exchange XU100) . Credit growth stood at 19.4%. Consolidated capital adequacy ratios are down by 2.3% to 17% compared to a year ago


Turk Telekom (OTC:TRKNF) expects net income growth of 9-10% in 2011 with an EBITDA margin of 40-45%


Stocks: TUR, TKF, TKC