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bne Turkey Daily ListExecutive Summary:
This is bne's Turkey daily newsletter, a list of the top stories in the country this morning. To manage your delivery options: click here: | ||
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| 1. Turkey announced schedule for privatization of bridges and highway network |
| Balkans.com |
| February 15, 2012 Turkey's Privatization Administration (OIB) has announced the schedule for the privatization of certain segments of the country's bridges and highway network, seen as one of the most prized assets of the country's privatization program. Ahmet Aksu, Deputy President of OIB said the privatization process for the country's highways and bridges is set to begin by June, following the finalization of the Baskent Dogalgaz Dagitim A.S. handover in late April or early May. The privatization of highways and bridges is expected to attract foreign investors from the US, Europe and the Far East, according to Aksu. Earlier reports state that the bridges and highways that are part of the privatization plan are the two bridges over the Bosphorus with their ring motorways, Edirne-Istanbul-Ankara Motorway, Pozanti-Tarsus-Mersin Motorway, Tarsus-Adana-Gaziantep Motorway, Toprakkale-Iskenderun Motorway, Gaziantep-Sanlurfa Motorway, Izmir-Cesme Motorway, Izmir-Aydn Motorway and Izmir and Ankara Ring Motorways. Turkey's privatization program will gain momentum with privatizations in the country's maritime sector, with tenders of Istanbul Galataport, Izmir Kruvaze Port and Izmir Pasaport, Istanbul Kalamis and Mersin Tasucu marinas taking place this year. |
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| 2. Turkey has no plans to cut Iranian oil imports, reports Reuters |
| bne |
| February 15, 2012 Turkey does not have plans to cut its imports of Iranian oil, Reuters reports, citing Turkish and Saudi sources. Turkey had given signals that it would buy more Saudi oil as international pressure against Iran rises. However, Turkey appears to be sticking with Iran. The European Union is trying to ban Iranian oil imports from July 1. Major Asian customers are also signaling they will lessen their dependence on Iranian oil. The West is trying to use sanctions to put pressure on Iran ahead of parliamentary elections next month. However, Ankara does not appear inclined to join in. A high level Turkish delegation in Riyadh over the weekend did not request additional oil supplies from Saudi Arabia, which is the only oil produce in the world that has the spare oil to replace what Turkey was buying from Iran. "Turkey will continue to buy from Iran unless the United Nations supports/endorses the EU and U.S. oil embargo," an Ankara-based energy official told Reuters. Turkey imports about 200 thousand barrels of oil per day from Iran. This covers 30% of its daily domestic consumption. Turkey's purchases are more than 7% of Iranian oil exports. Ankara's policy has been that it will not go along with sanctions on Iran spearheaded by the United States until they are endorsed by the United Nations. |
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| 3. Turkish treasury almost completed its borrowing program |
| Erste |
| February 15, 2012 The Treasury held 5 auctions this week, namely a 13-month zero coupon, 4-year TRY fixed coupon, 2-year TRY fixed coupon (benchmark), 9-year CPI-linker and 10-year TRY fixed coupon bonds. It held three auctions on Tuesday and sold TRY 8.1bn in total on top of yesterday's TRY 4.4bn, raising TRY 12.5bn ahead of its weekly redemption of TRY 12.5bn tomorrow. Demand at the auctions was high, with bid to cover ratios ranging from 2 to 3.5. The average interest rate at the benchmark bond auction stood at 9.24%, thus below the market consensus of around 9.3%. The Treasury has one more auction next week to complete its borrowing program, and only TRY 500mn left to meet its monthly borrowing target of TRY 13bn penciled in its program. Note that the Treasury has TRY 16.7bn of redemptions throughout the month, while the monthly rollover ratio is planned at 77.8%. |
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| 4. Turkey: Improvement in the labor market persisted in November |
| BGC Partners |
| February 15, 2012 TURKSTAT released the unemployment data in Turkey for November (average of October, November and December) today. According to the data, unemployment rate in Turkey fell to 9.1% in November 2011 compared to 11.0% in November 2010 and 9.1% in October 2011, while non-farm unemployment rate also remained at around historic low levels. More importantly, seasonally adjusted (SA) unemployment rate remained almost flat at 9.3% in November compared to 9.4% in October remaining at around historically low levels. When we look at the speed of improvement, we observe that the same level of improvement in the labor market continued in November. While we expect unemployment rate to reach 9.5% in the rest of the year, annual average unemployment rate will be close to 10%. However, we expect to see further increase in unemployment in 2012 because of expected slowdown in Turkish economy, which will curb job creation capacity of the country. |
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| 5. Eurostat indicators to support the detection of macroeconomic imbalances |
| Eurostat |
| February 15, 2012 Eurostat, the statistical office of the European Union, publishes for the first time today the indicators of the Macroeconomic Imbalance Procedure (MIP) Scoreboard. The Scoreboard indicators provide the statistical support to the Commission's Alert Mechanism Report. The headline indicators are available on a dedicated section of the Eurostat website, which will be regularly updated as the underlying data become available. For Walter Radermacher, Director General of Eurostat, "This is a confirmation of Eurostat's role as the leading provider of high quality European statistics. For the Commission, it is very important that the statistical information used in the Alert Mechanism is compiled according to the principles of the European Statistics Code of Practice of the European Statistical System. The Code ensures the relevance, comparability and quality of the data, produced by independent statistical institutions." The MIP is part of the six legislative proposals on economic governance adopted by the European Parliament and Council in November 20114. The MIP Scoreboard provides the basis for the economic reading of potential imbalances. The Commission will annually identify in its Alert Mechanism Report the cases for which more in-depth analyses are required. The initial Scoreboard consists of ten economic, financial and structural indicators relevant for the early detection of emerging macroeconomic imbalances at Member State level. To assess internal imbalances, the Scoreboard includes indicators on government and private debt, private credit flow, house prices and unemployment. To assess external imbalances, the indicators cover the current account balance, net investment positions, real effective exchange rates, share of world exports and nominal unit labour cost (see definitions in annex). Eurostat is the main provider of data for these indicators. Some data are also provided by the Commission's Directorate General for Economic and Financial Affairs, the European Central Bank and the IMF. |
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| 6. Industrial production down by 1.1% in euro area |
| Eurostat |
| February 15, 2012 In December 2011 compared with November 2011, seasonally adjusted industrial production1 fell by 1.1% in the euro area (EA17) and by 0.6% in the EU272. In November3 production remained stable in both zones. In December 2011 compared with December 2010, industrial production dropped by 2.0% in the euro area and by 0.9% in the EU27. Compared with 2010, the average production index for 2011 increased by 3.5% in the euro area and by 3.3% in the EU27. Monthly comparison In December 2011 compared with November 2011, production of energy fell by 2.0% in the euro area and by 1.2% in the EU27. Capital goods decreased by 0.8% and 0.1% respectively. Intermediate goods dropped by 0.7% in the euro area and by 0.2% in the EU27. Non-durable consumer goods remained stable in the euro area and rose by 0.4% in the EU27. Production of durable consumer goods increased by 0.2% and 0.4% respectively. Among the Member States for which data are available, industrial production fell in twelve and rose in eleven. The largest decreases were registered in Malta (-2.9%), Germany (-2.7%), Greece and Latvia (both -2.4%), and the highest increases in Denmark (+3.3%), Finland (+2.6%) and Ireland (+2.5%). Annual comparison In December 2011 compared with December 2010, production of energy fell by 11.9% in the euro area and by 10.6% in the EU27. Durable consumer goods decreased by 3.9% and 0.7% respectively. Non-durable consumer goods dropped by 0.8% in the euro area, but rose by 0.8% in the EU27. Intermediate goods fell by 0.5% in the euro area, but grew by 0.5% in the EU27. Capital goods increased by 0.8% and 2.3% respectively. Among the Member States for which data are available, industrial production fell in fifteen and rose in eight. The highest decreases were registered in Greece (-12.4%), Luxembourg (-9.6%) and Portugal (-8.9%), and the largest increases in Poland (+10.0%), the Czech Republic (+4.4%) and Latvia (+3.2%). |
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| 7. QE instead of rate cuts? |
| Erste |
| February 15, 2012 Since our last interest rate outlook from December, two important inputs for our interest rate forecast have changed. Firstly, inflation rates have not been approaching 2% as quickly as we expected, but have rather stayed close to 3% for now. If this continues, we would not expect any rate cuts in the near future. Furthermore, the downside risks to inflation stemming from the economy seem to have diminished lately, as also acknowledged by M. Draghi. We revise our inflation forecast to 2% for 2012 (in line with the ECB's December staff projection, which may be revised upwards again in March). We also adapt our interest rate outlook to only one rate cut for now, and wait for further inflation data, as well as the March ECB staff projections, to possibly cancel out our expectation for rate cuts. Secondly, the first 3Y LTRO has contributed to a much faster and stronger relaxation on the money markets than we had expected. The 3M Euribor (which is most relevant for the economy) has already approached the main refinancing rate by now, and debt crisis related risk aversion seems to be more than counteracted by ample liquidity for money market rates. Hence, in our view, the ECB could continue to expand their monetary policy stance through liquidity (QE) rather than rate cuts. Since our last interest rate outlook in December, two important inputs for our interest rate forecast have changed. Firstly, inflation rates have not been approaching 2% as quickly as we expected, but have rather stayed close to 3% for two months in a row now. Similar to the situation a year ago, the upwards surprise has also been related to the last increase in the oil price as well as administered taxes. The improvement in global growth perspectives and geopolitical uncertainty has led to oil price increases, the extent and longevity of which surprised us. However, if the oil price were to increase much further, this would dampen growth, which would put a lid on increases. Hence, assuming stabilization close to the current levels seems a reasonable risk scenario to us. This would imply that base effects for the y/y growth rate should set in very soon, which dampens the energy CPI inflation, as is visible on the following chart. It would also dampen the inflation rate, but probably less than we had anticipated at the end of last year. Furthermore, high inflation in Italy has kept the Eurozone inflation rate high. This is related to VAT hikes there. Indeed, among the biggest countries in the Eurozone (DE, FR, IT, ES), which add up to 77% of GDP, only Italy has posted an inflation rate above the Eurozone average since September (almost 1% was due to tax hikes). The upside risks stemming from VAT hikes could persist for some time in our view, but are hard to quantify. |
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| 8. Positive figures in CEE |
| UniCredit |
| February 15, 2012 At a difficult time for the Eurozone, the CEE does not appear to be too worrying. What does 2012 hold for the region? At macroeconomic level, overall the CEE is enjoying strong growth, particularly if compared with the nations of Eastern Europe. It is clear that the situation, particularly as of last summer, has become much more challenging as a result of the deterioration also related to the sovereign debt crisis at the periphery of the euro area. The positive news is that, if we look at the available data, the majority of countries have not been significantly influenced by the slowdown that has affected most Western countries. As such it is not a similar situation to that of 2008 following the international crisis. Is the good news valid for the whole area? We need to make a few distinctions. For example, looking at the most recent industrial production data, we can see that the growth dynamic has remained fairly strong in Poland, Czech Republic, Kazakhstan while in other countries there have been more visible signs of a slowdown. If we look at the macroeconomic prospects for 2012, the CEE nonetheless remains an area of growth with strong internal diversification: many countries will maintain a growth rate that is significantly higher than that expected in the euro area, while others, such as Slovenia and Hungary, may be more affected by the impact that the crisis is having in Europe or, in the case of Hungary, internal problems. All the same, we expect the growth rate in the region to be around 3% , much higher than the average expected in the euro area. How are the comforting macroeconomic forecasts reflected in the banking sector? If we look at the growth prospects for the region and the opportunities for the banking sector we can expect the CEE to maintain a positive gap in terms of opportunities compared with Western European countries. If we compare the economic growth dynamic with credit activities in the region, one of the biggest trends we have recorded in the post-crisis period is the substantial deviation between the two. Again it is important to distinguish between the various countries. As in Russia or Turkey which back in 2011 recorded a high two-figure growth between 20% and 30% of credit. Meanwhile in other countries, particularly the Baltic States, Hungary and Slovenia, the credit dynamic has remained weak on the whole. What impact has the European banking crisis had on the CEE banking system? The presence of Western banks in Central and Eastern Europe is obviously quite significant. However, the potential impact of a deleveraging by the European banks in the region seems to be manageable, as illustrated by a scoring system that is constructed beginning with the information available on the recapitalisation requirements resulting from the last EBA budget and the weight of the biggest European bank groups in the various countries. The majority of states, even the most exposed, are between 1.5 and 2 in this ranking system that goes from 0 to 5. Clearly, countries like Bulgaria, Romania and Serbia are more exposed because of the significant presence of Greek banks in their systems. Moreover, if we investigate the factors that underlie the weakness of credit by carrying out an econometric analysis, the evidence shows that the contribution of demand factors (that is demand for credit from both from businesses and families) plays a substantial role in explaining the weakness of the credit activity observed, in some countries in particular, in the last two years. Clearly, supply factors in these countries also play an important role and this is valid in particular for those whose banking systems are undergoing major restructuring, such as Kazakhstan and the Ukraine. |
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| 9. PERSPECTIVE: CEE airlines parked in bucket shop window |
| bne |
| February 15, 2012 When Hungarian flag carrier Malev was grounded on February 3, it became the fourth European airline to meet such a fate in 2012. The Visegrad region's remaining national carriers Polish LOT Airlines and CSA Czech Airlines are now facing an urgent search for investors at a time when those investors are hunting for bargains. Malev's fate was sealed when a January ruling from the European Commission ordered the return of previous state subsidies. The Polish and Czech flag carriers are unlikely to find similar state dollops of cash as the respective governments roll out austerity measures in the face of the debt crisis, while at the same time the airlines, which have been making losses for years, can expect an even tougher environment in 2012 as the recovery in the region stalls. Jan Prochazka from the Prague-based brokerage Cyrrus says that although LOT and CSA should be in better shape than their Hungarian peer thanks to better economics fundamentals in their respective countries, the pair have little choice but to search for an investor to take them under the wing. "Find an investor or shut the door," he says. "There is no possibility for restructuring or any other alternative strategy particularly for CSA." Adrian Furgalski of the Polish transport consultancy TOR is a little more bullish over LOT, suggesting that its situation is not so bad that it has to be "saved" (LOT is expected to cut a 2010 loss of €22m in half in 2011). However, he also admits that in the face of "the growing importance of low-cost carriers, the increasing strength of the three European airline alliances and the unstable condition of the sector," LOT definitely needs a strategic investor. "In this context," he says, "national carrier is too grand a name for such a small airline." Click to read more |
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| 10. The changing face of Mongolian elections |
| bne |
| February 15, 2012 In June, Mongolians will go to the polls. And while issues such as family, clan and religion are still important, the mining boom, business and nationalism have taken on a much greater significance in people's voting intentions. The Mongolian people have the sense that their country is entering an important new era in its history, and this is expected to be reflected in voter turnout at the next parliamentary elections set for June 20 or June 27. Mongolia has had an unusually high turnout rate for its elections, starting at above 90% when the first elections were held in 1990 and still running at 75% in 2008 high compared with the EU average of 65% and the US level of 63%. The debates and campaigns are also feisty, with politicians regularly slandered, blamed, supported and praised on over 100 TV channels and in 120 published papers. This has brought the elections into most people's homes and changed the way those people vote, while amendments to the election law approved in December, which changes the system from a majoritarian one, under which individual candidates were elected by a majority vote, to a "mixed member proportional system", will also have an effect. "There has been a change in the mindset of the population" says Tulga Buya, PR representative of the Mongolian People's Revolutionary Party. "Before people would vote by age and region, but now people are becoming more and more divided by class and income." Click to read more |
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| 11. British experts to visit Syrian camps in Turkey |
| Hurriyet Daily News |
| February 15, 2012 Britain is to send human rights experts to Syrian refugee camps in Hatay in the coming days, in order to document the human rights violations in Syria and gather evidence of crimes. "These efforts are part a possible future prospect of bringing people who commit crimes against humanity to trial," a British diplomat told Hurriyet Daily News. Experts from human rights organizations in Britain will prepare a report based mainly on the testimonies of the refugees staying in the camps. The report will be shared with the international community after it is concluded. Click to read more |
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| 12. Turkey's Felicity Party makes comment on diva's death |
| Hurriyet Daily News |
| February 15, 2012 The early death of singer Whitney Houston and other Western pop stars shows why Turks should not idolize decadent cultural icons who act immorally but instead remain steadfast in Islam, the Felicity Party's Istanbul Provincial Directorate has said. "Just like the death of many other celebrities before, people that are presented by the Westerners as model characters die alone in a corner," the statement said, according to daily Milliyet. "Like Marilyn Monroe, Elvis Presley, Michael Jackson and Amy Winehouse, Houston drew her last breath in alcohol and a drug coma, too," the statement from the conservative party said. "What is befitting us is to protect our own faith and values of civilization, which is the only solution to bring peace and welfare to the world and to rise again just like in our bright history in order to rescue humanity from depression." Click to read more |
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| 13. Greek Patriarch to give speech in Turkish Parliament |
| Hurriyet Daily News |
| February 15, 2012 Greek Orthodox Patriarch Bartholomew is set to give a speech to Parliament's Constitutional Commission on Feb. 20 to expound on the problems of Turkey's minorities, marking the first such occasion in the history of the Turkish Republic. "Our Armenian deputy patriarch says we are happy and not beset by any problems every time a microphone is extended to him. To the contrary, we have problems [of such magnitude] that they are awaiting urgent solutions. Patriarch Bartholomew, on the other hand, does not shirk away from bringing up problems with great courage," Arev Cebeci, a former deputy candidate nominee from the opposition People's Republican Party (CHP), told the Hurriyet Daily News. Click to read more |
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| 14. Turkey very 'patient' in EU candidacy, says Klaus |
| Hurriyet Daily News |
| February 15, 2012 Turkey has been very patient while enduring the candidate process for European Union membership, the Czech Republic's president said yesterday. "I wouldn't be so patient," President Vaclav Klaus said in a joint press conference with his Turkish counterpart Abdullah Gul. Click to read more |
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| 15. Top US general holds security talks in Ankara, Turkey |
| Hurriyet Daily News |
| February 15, 2012 Turkey hosted a top U.S. commander in Ankara yesterday a day after Turkey's Foreign Minister Ahmet Davutoglu held important meetings in Washington on Syria. The commander of the U.S. Central Command, Gen. James N. Mattis, visited Chief of General Staff Gen. Necdet Ozel at the military headquarters, the military said in a written statement. The statement did not elaborate on the topic of the meeting between the two commanders. The meeting came at a moment when the Middle East is passing through a difficult moment with increasing speculation that foreign powers could stage military interventions against Iran and Syria. Click to read more |
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| 16. Intelligence not immune to justice, say Turkey's prosecutors |
| Hurriyet Daily News |
| February 15, 2012 We have been dragging the public prosecutors through the mud for several days. A major portion of the media, including me, has written that it was a huge success for the National Intelligence Organization (MIT) to infiltrate its agents into the KCK, which is the Kurdish Communities Union, the alleged urban wing of the outlawed Kurdistan Workers' Party (PKK). Not only the media but members of the ruling party also argued the prosecutors acted against the country's interests by taking an MIT agent to court. The primary source of surprise was that the undersecretary of MIT, a person whom the prime minister favors and trusts very much, was called to testify. Because this process was unprecedented, those who could not draw any conclusions generated conspiracy theories. Click to read more |
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| 17. Spy bug allegedly found in Turkish Council of State room |
| Hurriyet Daily News |
| February 15, 2012 A Council of State member was said to have found a spy bug in his office last week and informed the police about the incident. The member also made a denunciation to the public prosecutor, according to a daily Milliyet report. Zeki Yigit was appointed to the Council of State last year by President Abdullah Gul. Click to read more |
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| 18. Turkish Parliament's Human Rights Research Commission to view UAV footage |
| Hurriyet Daily News |
| February 15, 2012 Turkish Parliament's Human Rights Research Commission is to watch the unmanned aerial vehicle (UAV) footage of the Turkish Armed Forces' air raid which killed 35 smuggling villagers on Dec. 28 in Uludere along the Iraqi border. The head of the commission, Ayhan Sefer Ustun, was quoted by state-run TRT as saying that the Ministry of Defense would take the footage to the Turkish Parliament today. Click to read more |
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| 19. Turkish KCK met its demise, police chief claims |
| Hurriyet Daily News |
| February 15, 2012 Istanbul Police Chief Huseyin Capkin defended yesterday the controversial operations against the Kurdistan Communities Union (KCK), saying the detentions of hundreds of people around Turkey had struck a blow to the alleged urban terrorist network. "The rural-urban network of the KCK has been broken down. The KCK has now met its demise," Capkin told daily Aksam in reference to the latest KCK raids Feb. 13. Law enforcement officials took 149 people into custody Feb. 13 during the fifth major operation launched against the KCK since April 2009. The Ankara Police Department planned the operations against the KCK, which then spread to 28 provinces across the country under the supervision of the Istanbul Anti-Terror Branch Department. Click to read more |
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| 20. Azerbaijan gaining power in Turkey's energy market |
| Hurriyet Daily News |
| February 15, 2012 Turkey and Azerbaijan are near reaching an agreement on the construction of a major pipeline that would carry a vast amount of natural gas to European markets, according to a top Azeri energy official. Turkey and Azerbaijan will "soon" agree on construction of the Trans-Anatolian Pipeline (TANAP) that will carry natural gas to Europe, potentially rivaling the European Union-backed Nabucco project, said Rovnaq Abdullayev, president of Azeri state-owned State Oil Cooperation of Azerbaijan (Socar) during a televised interview on ANS TV on Feb. 12, Bloomberg News reported. Click to read more |
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| 21. Tourism event in Istanbul, Turkey attracts global companies |
| Hurriyet Daily News |
| February 15, 2012 The East Mediterranean International Travel & Tourism Exhibition (EMITT), ranked as the fifth largest tourism exhibition in the world, brought together more than 4,500 participants and 114,000 visitors from all over the world, exceeding last year's record, according to a top executive of the organizing company. "We reached a greater number of visitors and participants at this year's fair," said Hacer Aydin, general manager of Ekin Fuar, the fair organizer, speaking to Daily News on the phone yesterday. Click to read more |
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| 22. Buy less cellular phones, help curb trade gap, Turkish minister advises |
| Hurriyet Daily News |
| February 15, 2012 Turks should cut down high spending on imported products such as cell phones to help curb the booming trade deficit, Turkish Economy Minister Zafer Caglayan advised citizens yesterday. Also suggesting a bunch of measures for industries, the minister said the government's efforts to balance foreign trade might turn out useless if consumers continue to spend recklessly. Click to read more |
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| 23. India launched trade complaint against Turkey's policies on imports of cotton yarn |
| Balkans.com |
| February 15, 2012 India has launched a trade complaint against Turkey's policies on imports of cotton yarn, the World Trade Organization (WTO) said on its website on Tuesday. India is objecting to Turkey's use of "safeguard measures" to help its cotton industry, which one Indian official said could affect Indian exports worth around $600 million per year. Safeguard measures are temporary protectionist tariffs, permitted by WTO rules, to help a specific industry that is threatened by an unexpected surge of imports. India launched the complaint on Monday by "requesting consultations" with Turkey at the WTO, the last step to resolve a disagreement before entering a full-fledged legal dispute. |
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| 24. Foreign tourists spend 723 million euros in Turkey, Brits take the lead |
| Hurriyet Daily News |
| February 15, 2012 Foreign tourists spent a total of 723 million Euros in the period from September to December 2011, according to the Visa Europe Mediterranean Countries Tourism Report. British tourists spent the most in Turkey with 103.8 million Euros, followed by Russians (69.2 million Euros), Americans (64.6 million euros), Germans (56.8 million Euros) and French (53 millioneuros). Click to read more |
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| 25. Turkish Bank Asya disclosed tax purpose financials |
| Erste |
| February 15, 2012 Bank Asya reported its preliminary 2011 YE tax purpose results. Net profit for the full year was TRY 216mn versus our forecast of 223mn corresponding to 25% annual growth. Implied 4Q11 net profit is TL 52mn versus our call of 59mn and TRY 56mn consensus estimates, and implies 15% q/q contraction. Tax results do not include footnotes or any balance sheet items; hence we cannot comment on volumes, margins or RoE. However, tax results are generally either identical with -or very close to- official BRSA results. |
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| 26. Turkish Turk Telekom's 4Q11 results below estimates |
| Erste |
| February 15, 2012 The 4Q11 results were below our and consensus estimates, driven mainly by lower than expected fixed line EBITDA. The fixed line business posted flat revenues and a 9.4% y/y lower EBITDA. Excluding the TRY 65mn incentive expenses from voluntary retirement program, the fixed line EBITDA would decline by 4.1% y/y and the implied EBITDA margin would be 51.2%. The mobile segment was surprisingly strong, especially on the EBITDA level (+34.4% y/y). Excluding the TRY 31mn reversal of doubtful receivables provision, mobile EBITDA would increase by 1% y/y only and give a margin of 12.0%. Financial results improved considerably q/q and y/y due to lower FX losses. Taxes were higher than expected, due to tax effects of expenses that are not tax deductable and higher deferred tax position. Mainly due to improvement in financial results, net income could increase by 6.4% y/y to TRY 595mn. The company reached the 2011 revenue target of 9-10% y/y and its EBITDA margin target of 40-45%. |
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| 27. Turkish Halkbank disclosed tax purpose financials |
| Erste |
| February 15, 2012 Halkbank reported its preliminary 2011 YE tax purpose results. Net profit for the full year was TRY 2,045mn versus our forecast of 2,048mn corresponding to 2% annual growth. Implied 4Q11 net profit is TRY 504mn versus our call of 507mn and TRY 512mn consensus estimates, and implies flattish bottom line in quarterly terms. Tax results do not include footnotes or any balance sheet items; hence we cannot comment on volumes, margins or RoE. However, tax results are generally either identical with -or very close to- official BRSA results. Looking to the details of the P&L, the Net Interest Income came in line with our estimates, materializing at TRY 1,102mn, up by 30% q/q. Fee income declined by 1% q/q. |
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| 28. Turkish poultry firm heads to Riyadh |
| Hurriyet Daily News |
| February 15, 2012 Turkey's Seker Pilic has become the first firm to export poultry to Saudi Arabia since the country lifted its seven-year ban on poultry imports, enacted following the bird flu epidemic in 2005. Seker Pilic's Assistant General Manager Emre Bor said the company was honored to be the first firm to sign a poultry agreement with Saudi Arabia and that the Middle Eastern market was pivotal for the Turkish poultry sector. Click to read more |
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| 29. Turkish Vakifbank Welcome shift in balance sheet let down by weighty provisioning burden |
| Erste |
| February 15, 2012 In the final quarter of 2011, Vakifbank reported a net profit of TRY 263mn, in parallel with our TRY 250mn forecast, while slightly below the consensus estimate of TRY 287mn. The bank's 4Q11 bottom line marks a 17% q/q and 33% y/y dive. The dismal quarterly performance can be blamed on the hefty rise in provisioning expenses. As a result, quarterly RoE declined by 2pp to 11.3%. The 12M11 net income is brought to TRY 1,227mn, implying a 6% y/y surge, and corresponding to 13.7% trailing RoE. Vakifbank has successfully managed its spreads by reshuffling its loan and funding mix in the quarter, which resulted in margin expansion. A shift in the loan mix... In the quarter, the bank's TRY loan book surged by 7% q/q, exceeding the sector's 3.6%. FC loans on the other hand, contracted by 3.8% q/q in dollar terms, lagging the sector average of 0.1% growth. Growth was mainly driven by higher yielding segments such as commercial instalment loans, up by 26% q/q. In order to defend margins, the bank refrained from growing in consumer related areas, and GPLs and mortgages grew by 2.4% and 3.1% respectively in quarterly terms. The bank shifted its loan mix from consumer and corporates to SMEs in the quarter, which supported overall spreads. ... as well as in funding... With the aim of lowering funding costs, Vakifbank reduced its exposure to repo transactions and paid great attention to deposit gathering during the quarter. Accordingly, the bank's total deposit base registered 9.7% q/q expansion, while repo funding dove significantly by 45% q/q. the share of repo funding declined from 12.2% to 6.7%. Within deposits, we note an 8.7% q/q jump on the local currency front and a 12% surge in FC deposits. In consequence, the loans to deposits ratio eased to 94% from 98.9% a quarter earlier. Strong top line performance... In 4Q11, Vakifbank showed improvement in its LC loan yields, up 55bps q/q; while deposit costs almost remained flattish over 3Q11, which resulted in 45bps improvement in spreads. The bank's quarterly NIM expanded by 30bps to 4.2%, with a 12% q/q jump in the NII. On the fee front, 3% q/q growth fell short of its peers, in parallel with our estimates.... offset by higher provisioning expenses... In quarterly terms, provisioning expenses jumped by 45% over 3Q11 materializing at TRY 297mn, which slightly exceeds our forecast. The bank set aside around TRY 32mn of free provisioning in 4Q11. Meantime, its NPL ratio remained stable at 3.63% q/q, versus the sector's 2.7% level. For the quarter, the bank's coverage ratio slightly declined to 95% from 97% a quarter earlier. Overall, we consider Vakifbank's 4Q11 results favourable with robust growth, a shift in the overall funding base, and significant margin expansion. Meanwhile, higher than expected provisioning expenses are the main culprits of the quarter. With concerns over rising NPLs, and a low capital base, we maintain our Hold for the bank. |
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| 30. Turkish Isbank Noteworthy improvement across the board |
| Erste |
| February 15, 2012 Very much exceeding our TRY 524mn forecast and consensus estimates, Isbank revealed TRY 865mn net earnings in its 4Q11 financials. The deviation can be attributed to higher than expected trading gains and stronger top line profitability. The bank's 4Q11 net income marks a 165% q/q jump, and resulted in significant improvement in the RoE to 19.3% from 7.3% in quarterly terms. The bank's 2011YE bottom line is carried to TRY 2,667, marking an 11% annual surge. Isbank closed 2011 on 15% trailing RoE, which is behind both the sector's 16% level and the 18% level of the large scale banks. Growth intact in 4Q11. Isbank posted a 7% q/q jump in total loans, exceeding the sector's 3.6% growth in the same time period. Growth was driven mainly by local currency lending, which rose by 7% q/q, while FC loans also grew by 6% q/q in US$ terms. Looking at the full year results, we note 43% annual growth in total loans, which is expected to be the highest in the sector. Please note that Isbank is the leader within the sector in terms of total assets, which stand at TRY 92bn as of 2011. Similar to its peers, Isbank reduced the share of repo transactions in the quarter by 4% q/q, and concentrated on deposits, which grew by 3% in 4Q11. The bank's loans to deposits ratio has deteriorated by 4pp to 93%; but remains one of the lowest in the sector, implying further growth potential. Please note that when comparing full year results, there is an 11% annual surge in deposits, while repos jumped by 92% at the same time. Spreads improved in the quarter. Throughout 2011, Isbank was criticized for its low margin outlook, despite its strong loan growth; which was also one of our main concerns for the bank. However, in 4Q11, it delivered a strong margin performance, exceeding our forecasts. During the quarter, the bank's total deposit costs declined by 40bps, while loan yields improved by 30bps. This, coupled with improving yields on CPI linkers, saw Isbank's margins expand by 50bps q/q to 3.5%. Overall, the NII materialized at TRY 1,316mn, implying a 25% quarterly jump; meanwhile we had expected around TRY 1,220mn. Eye- catching fee growth. Isbank's total commission based income grew by 13% in 4Q11, thanks to seasonality factors. Fees now cover 45% of total operational expenditures, from 41% a quarter earlier. In annual terms, Isbank delivered 21% growth in total fee income, which exceeds the sector average; this is mainly supported by credit appraisals and credit cards. 2012 guidance. During the conference call, management shared their 2012 expectations, which are as follows: i) 15-17% loan growth, ii) 10-12% increase in deposits, iii) L/DR hovering at around 95-100%, iv) NPL ratio remaining below 2% levels, v) 20bps margin expansion, v) CPI plus growth in OPEX, and vii) 40-45 new branches. Our forecasts are more conservative than Isbank with a lower loan growth and stable margins. Isbank delivered a strong quarterly performance in 4Q11, with robust lending growth, margin expansion, strong trading income and around 262% growth in its quarterly operating income. There is TRY 279mn trading income booked as a result of TRY depreciation and derivative instruments; this was the main reason behind deviation in the actual figures. We currently maintain our estimates and our Hold recommendation for the bank. |
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