Deutsche Bank Markets Research Emerging Europe Strategy Date Turkey 12 May 2016 Turkish Equities Strategy Strategy Update Kazim Andac Erol Danis, CFA Research Analyst Research Analyst Top recommendations (+90) 212 319-0315 (+90) 212 3190326
[email protected] [email protected] Koray Pamir Hilal Varol Risk appetite roiled by global headwinds and domestic political disruption Research Analyst Research Analyst Deteriorating risk perception due to a less conducive global backdrop for the (+90) 212 3190327 (+90) 212 319-0332 EM universe has roiled the positive sentiment of early 2016. Risk aversion was
[email protected] [email protected] stimulated further by the reawakening of domestic political risks (especially following the unexpected ouster of the PM), triggering a correction to the TR asset risk premium (the USD/TRY exceeded 2.95, 10Y bond yields rose above Athmane Benzerroug 10% and the BIST100 retreated 13% since end-April). TR equities currently Research Analyst trade at 1Y forward P/E and EV/EBITDA of 9.4x and 8.3x, respectively, and (+971) 4 4283938 valuations vs. peers further widened after an 8% underperformance against
[email protected] the MSCI EM index (TR equities’ P/E discount relative to MSCI EM climbed to 27% vs. the 3Y average discount of 14%). Based on a RF of 10%, our BIST100 target stands at c.89,000, implying 13% upside in 12-month perspective. Top Picks Current Price Target Price In our view, risk premium is likely to remain elevated in the coming period on Compa ny RIC Re turn 1) changes in the cabinet,