TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• MSCI Asia is down by 1.6% this morning while US and EU futures are also to the south in between 0.5%-1%. We expect negative opening for BIST.
• Corporate tax rate has been increased from 20% to 25% for non-financials and from 25% to 30% for the banks and other financial institutions. Income generated from exports will be taxed 5pp less, so exporters will face relatively less negative impact. We were surprised to the strength of the stocks yesterday as normally a 5pp corporate tax hike should have had a similar downbeat impact on share prices assuming that the new tax rate will remain indefinitely. So apparently market participants perceived that as a temporary move. Given the additional burdens on the budget such as earthquake related costs, FX protected TRY deposit accounts and election spending, tax hikes have been anticipated. On top of the corporate tax increase, annual levy on vehicles are doubled for a single year (IE: from TRY2.5k to TRY5k for a 1300cc 1 year old car). Going forward we may see increased taxes on special consumption tax and income tax as well.
• In June, the consumer price index announced as 3.92% monthly, and the annual CPI went down to 38.21%.
• The regulation of the Ministry of Commerce prohibiting the marketing of second-hand motor vehicles at a price higher than the current sales price until 1 January 2024 published in the Official Gazette. We believe that the sellers will find loopholes to overcome that restriction in days.
• Treasury support application in FX-linked deposits is expected to be transferred to the CBRT. We see it as potential monetisation. So going forward, instead of being a burden on budget balances, the burden on FX linked TRY deposits converted from TRY accounts will be saddled on the central bank, which might be either financed through reserves (less likely option) or via printing money. Money printing may not be necessarily inflationary as the incremental amounts will be deposited in silent deposit accounts with limited flow going for spending.
• According to the weekly securities statistics released by the CBRT, foreigners bought 399 million $ of shares in the week of June 23. This figure was the biggest purchase in 2023 on a weekly basis. Currently the foreign ownership in free float stands at 29.2%, nicely above the 27.3% trough a month ago.
• Fed minutes pointed that further rate hikes and possibility of a rate hike is still on the table.
• New York Fed President Williams said that it was the right decision for the Fed to keep interest rates constant in June, but interest rates may need to be increased again at some point in the face of continued economic strength.
• US President Biden reiterated US support for Sweden's membership in NATO.
• The US announced that it opposes China's export controls on metals and will consult with its allies.
• Chinese senior advisor stated that China's export restriction on metals used in chip manufacturing is just the beginning.
• OPEC announced that negotiations are being hold for membership with 4 countries (Azerbaijan, Malaysia, Brunei and Mexico).

AGENDA
• Turkey’s Real Effective Exchange Rate data and weekly security statistics will be released today at 14:30 PM Turkish time.
• ADP Non-Farm Employment data and Unemployment Claims will be released in the USA.
• A high-level meeting between Turkey and Sweden will take place on 6 July in Brussels.
• US President Biden is scheduled to travel to England, Lithuania and Finland on 9-13 July.
• NATO Leaders’ meeting will take place on 11 - 12 July.

COMPANY NEWS:
• ASTOR: A sales contract for Power Transformers, Distribution Transformers, High Voltage Breakers and Switching Products worth $3.6 million was signed between the company and a private company. The ratio of the contract to the revenue in 2022 is 1.39%.
• TOASO: Production will be temporarily suspended due to planned maintenance-repair works at Tofaş Bursa factory between August 7th and 30th.
• VERUS: With the purchase of 368,284 shares at a price of 62.90 TRY, and reaching the limit of 50.73% in capital, it has been announced that VERUS will make a takeover offer at 65.45TRY, and an application has been made to the CMB within the specified period.
• LIDER: In June, it was announced that 60 vehicles were purchased and 47.8 million TL was paid.
• MGROS: In June, 58 sales stores were opened among them 34 Migros, 16 Migros Jet, 5 Macrocenter and 3 in Mion format

 TFG Istanbul Menkul Değerler A.Ş.
  www.tfgistanbul.com/arastirma-raporlar
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                  Yasal Uyarı
 
 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.