REPRESENTATIVE OFFICE ISTANBUL DECEMBER 12TH, 2006
Terence Singh + 90 212 293 00 32 e-mail: [email protected] ECONOMY & MARKET MARKETS
At Monday’s close, market situation was:
O/N for ISE Repo market YTL/USD Central Bank Governor Yilmaz revealed that & TLR Interbank market the short FX position in the non-banking 19.30 1.4269 Most actively traded T-Bills sector surged to USD 43bn in September 2006 Date Maturity C/Rate from USD 29bn in end-2005. 11/12/2006 13/08/08 21.57% ISE-100 index ISE- 100 Ref $ CBT is not expected to leave its cautious 39,462 2.77 stance in short-term interest rates in the short run. The rate cut is expected in the second quarter of 2007 at earliest Growth: 3Q06 growth figures were announced at 3% YoY in GNP and 3.4% YoY in GDP. FX reserves of the Central Bank were up by Accordingly GNP and GDP reached 5.7% and USD 296mn to USD 58.5bn last week. 5.6% in 9 Months. Full year growth is expected at 5% for both GDP and GNP. Trade Deficit was recorded at USD 4.4bn in October indicating a 33% rise YoY. Industrial production increased 2.5% in Accordingly Jan-October trade deficit reached October compared to the same month last 44.5bn with a YoY increase of 26.7%. year. Benefiting from Euro’s strengthening against the USD dollar, exports are expected to see Inflation: CPI increased by 1.29% in another record in November, estimated at November while PPI posted negative figure at USD 8.5bn, indicating a 40% rise YoY. -0.29%. Accordingly YoY CPI declined to Imports remained at a high level due to the 9.86% while YoY PPI fell to 11.67%. significance of imported intermediate goods in real sector’s production and strong investment Auctions: the following table depicts the demand. results of the Treasury auctions held over the last 2 weeks: October Current Account deficit was released at USD 2,476mn. Accordingly 12 months C/A Issue Mat.Date Mat Bid Sales Cov Net Ann. . NTL* NTL* % Sales Comp rose to USD 34.4bn, implying that the C/A Mo mn mn NTL* Yield deficit-to-GDP ratio will hit 9% at the end of nth mn (%) 28/11/06 25/11/09 36 1,593 391.1 25 650.5 5.06% 2006. % 05/12/06 12/12/07 12 1,402 630 45 1,451 21.0% % Treasury Cash Budget yielded USD 3.2bn 05/12/06 13/08/08 20 3,071 1,959 64 3,602 21.7% % primary surplus while posting USD 1bn of surplus. Accordingly in January –November period, the primary surplus reached USD 27bn while deficit remained at USD 3.3bn on cash basis.
POLITIC, DOMESTIC & INTERNATIONAL AFFAIR
IMF: Director Board will convene on EU accession talks: EU Foreign Ministers December 13th to approve the New Letter of finalized the decision on negotiations with Intent and release of credit tranche of around Turkey and adopted the EU’s recommendation USD 940mpn, which will conclude the 5th not to open negotiations on 8 chapters until review. Turkey opens its ports to the Greek Cypriots. They ignored the Turkish government’s verbal 1
REPRESENTATIVE OFFICE ISTANBUL DECEMBER 12TH, 2006 offer to open one port and one airport to the Greek Cypriot carriers.
SECTOR NEWS & PRIVATISATION
Banking obtained prequalification for three of the regions that will be privatized in the upcoming Garanti Bank mandated Watson Wyatt tender process. Limited to access possible M&A opportunities and other strategic opportunities for its Sabanci Holding signed a JV agreement with participations Garanti Emeklilik and Hayat Austrian Verbund for potential investments in A.S., which are in the pension fund business. the domestic electricity market
Oyakbank: Reportedly the majority of shares Petrol Ofisi will pay the fine imposed by of Oyakbank will be sold to Standard Bank of EMRA (YTL 586.6mn after injunction) in 18 England. months. The first instalment is starting as of December 2006. Denizbank call tender: in the first four days (December 11th) the total amount participated Reportedly, Lukoil cancelled plans to build a reached 69.8mn shares (USD 733mn), refinery and are considering buying Tupras’ representing 88% of free float. Accordingly Kirikalle refinery instead. free float declined to 2.93% from 27%. Privatisation: The draft bill that extends the expiration of authorization to privatize Halkbank to 10 The Privatization Administration cancelled the years is submitted to the Parliament and is privatization of sugar factories without citing expected to be discusses in the commission the underlying reason. this week. This should be a way to bypass the suspension issued by the Council of State on Other December 4th. Sabanci’s nylon and tire cord company, Energy Kordsa Global, has signed a letter of intent with another true cord fabric and yarn Turcas and State Oile Company of Azerbaijan producer, Branta Malia, based in Indonesia, to Republic (SOCAR) signed the JV agreement purchase 54% of the Company’s shares in line (25-75) on December 5th. In addition Turcas with Korda’s strategy to expand to Far Eastern introduced its new logo and corporate image. region. Sabanci Holding will apply for an The JV plans to start feasibility studies exemption for the share call obligation in regarding the construction of refinery facility in Kordsa. Ceyhan region and enter natural gas market. Reportedly Pegasus Airlines is in talks to Enka and Enel announced that they had acquire Sun Express – 50/50 partnership of teamed up to bid in power assets tenders THY with Lufthansa. organized by PA on January 19th, 2007. Enka
COMPANY NEWS Garanti Bank signed a syndicated loan agreement of USD 700mn with a maturity of 2 Turkcell: years at a cost of Libor + 0.625%. This loan After months of discussion Turkcell, will be used in foreign trade finance. Alpha and Cukurova groups could agree on a CE- Surreya Civil, a Harvard MBA Akbank mandated consortium of banks to who had been working in Microsoft provide two-year USD 500mn syndication Headquarters. from international capital markets.
2
REPRESENTATIVE OFFICE ISTANBUL DECEMBER 12TH, 2006
THY: the installed capacity of Power Generation to Turkish Airlines (THY) GM Kotil 210MW but also the conversion of using from announced that Turkish Airlines would fuel-oil to natural gas in Power Production will sign the agreement to join Star Alliance on be implemented in April 2007. December 9, adding that the number of passengers of airlines joining the alliance Dogan Holding posted USD 613mn net historically rose 10%. income in 9M06, 35% higher YoY. However Announced USD 92mn Net Income for YoY comparison is not that meaningful though 9M06, indicating a YoY contraction of as Dogan Holding started full consolidation of 13% YoY. Operating profit was posted at Petrol Ofisi in 4Q05 after it acquired 43% USD 22mn after losses in two consecutive stake from Isbank in September. Consolidated periods. Domestic flight and cargo revenues declined by 11% in 3Q06 and came at revenues surged by 16% YoY to USD USD 1,853mn on the back of 16% decline in 460mn in 9M06. International revenues energy revenues. Revenues from Media rose by 18% YoY to USD 1.5bn. Segment improved by 11% in 3Q06.
Vestel: in 9M06 financials Vestel Elektronik Dogan Yayin Holding suffered USD 52mn reversed most of its FX losses but still posted net loss in 9M06. Consolidated revenues USD 24mn loss. Revenues increased by 19% reached USD 1,091mn up by 22% YoY on the YoY on the back of strong exports growth in back of a 23% increase in ad revenues. TVs and white products. Due to the accounting practices the company’s EBITDA Koc Holding announced 3Q06 (9M06) net margin is very sensitive to fluctuations in YTL. earnings of USD 572mn (USD 5mn). The boost in the 3Q06 came from FX gains due to Erdemir posted USD 282mn net income in recovery of YTL and low effective tax rate at 9M06. While Net Sales grew to USD 2.46bn by 13%. 9M06 revenues were posted at USD a moderate 7% YoY, EBITDA rose by 50% to 25.3bn. In terms of each segment in 3Q06 USD 653mn from USD 437mn. results energy leads the way with 54.7% share Operational Profitability of the company followed by consumer durables and improved substantially as suggested by the automotive with 15% and 17%. increase in gross, operating and EBITDA margins, which reached respectively 22.4%, Sabanci Holding posted USD 65mn (USD 18.8% and 26.6%. 294mn) in net earnings in 3Q06 (9M06). 3Q06 revenues climbed by 3% YoY and reached Turcas announced its 9M consolidated USD 3bn bringing 9M06 cumulative revenues financial results. The Company posted to USD 8.9bn. Finance and non-finance YTL238.8mn (USD 167.6mn) Net Income. segments both grew at a slower pace in 3Q06, The strong bottom line performance is due to at respectively 3% and 4%. Cement Sector the YTL 203mn of profit booked through its recorded an impressive growth at 32% in 3Q06 stakes in Shell-Turcas JV Company, pursuant thanks to Cimsa’s acquisition of Eskisehir to the use of the equity method. Cement.
Petkim announced that the on-going investment regarding not only 30% increase in
Sources: Anadolu Agency, Turkish Daily News, Merrill Lynch, Dışbank, Bender, Garanti Bank, Detay, MEED, DİE, Undersecretary of Treasury, CBRT, Yapı Kredi Yatırım, FinansIn vest, Hurriyet, Sabah, Radikal, Akşam, Financial Times, Ege Yatırım, TEB Yatırım, EBA newsletter, Cumhuriyet. 1
1 This report has been prepared by the Representative Office of BNP Paribas in Istanbul. The information and data contained in this report has been acquired from sources believed to be reliable, however its accuracy and completeness can not be guaranteed. This report is published solely for information purposes, neither the information nor the opinions expressed herein is to be interpreted as an offer to sell or a solicitation of any offer to buy securities. BNP Paribas accepts no liabilities for any direct loss arising from the use of this report. This report may not be reproduced, distributed or published completely or partly by any other party without the prior written consent of BNP Paribas. 3