Market Watch Tuesday, August 08, 2017 www.sekeryatirim.com.tr Agenda

07 Monday 08 Tuesday 09 Wednesday 10 Thursday 11 Friday  Germany, June industrial  TurkStat, June industrial  U.S., June wholesale  U.S., jobless claims  CBRT, June balance of production production inventories  U.S., July PPI payments  U.S., July CPI

Outlook: Major stock markets have advanced to new highs, and the BIST100 has Volume (mn TRY) BIST 100 also tested new record-highs, closing up 1.1% at 109,781 on Monday. Total trading volume in the market was at TRY 6.6bn. Today, market participants 109.781 will follow TurkStat’s June industrial production release; there are no other 10.000 110.000 108.545 major data announcements. Asian markets have seen mixed trading this 8.000 morning, and the European stock markets are expected to open slightly 107.154 108.000 106.525 down. We expect the BIST to maintain its uptrend in parallel to rising global 6.000 106.147 risk appetite, although we caution that the likelihood of profit taking rises 106.000

after swift upsurges. We expect the BIST to open positively today, refresh- 4.000

4.912 4.958

ing its new record highs. RESISTANCE: 110,000 /111,200 SUP- 5.418 104.000 4.667

2.000 4.667 PORT: 109,100/108,600. 0 102.000 1-Aug 2-Aug 3-Aug 4-Aug 7-Aug Money Market: The Lira was positive yesterday, gaining 0.14% against the USD to close at 3.5295. Additionally, the currency depreciated by 0.07% against the basket composed of $0.50 and €0.50. The local fixed income markets were rela- Indices (TRY) Previous Last Chg. YTD tively flat. The two-year benchmark bond was traded within a tight range of BIST 100 108.545 109.781 1,14% 40,50% 11.59%-11.62%, ending at the 11.60%, unchanged from its previous BIST 30 133.555 134.940 1,04% 41,30% close. BIST-Financial 139.083 140.622 1,11% 35,74% BIST-Industrial 119.040 120.436 1,17% 44,09% Company News: BIST-Services 68.110 68.681 0,84% 38,40%

Otokar (OTKAR.TI; NC) has announced a 2Q17 net loss of TRY 9.1mn, Advances Declines Most Active which is below the market consensus of a TRY 1.0mn net loss. (2Q16:TRY Stocks (%) Stocks (%) Stocks Vol (TR) 7.6mn). After the 2Q17 Earnings Results, the Company had attained TRY YGYO 19,10 PRKAB -9,12 THYAO 538.944.535 28.1mn of net profit in 6M17. (6M16: TRY 15.7mn). TIRE 13,98 COMDO -3,44 KOZAA 396.417.527 IHLAS 11,11 TUCLK -2,98 ASELS 352.782.498 (BOSSA.TI; NC) has announced that the Mandatory Tender Offer ULUUN 11,06 SONME -2,72 GARAN 272.643.273 (MTO) would be performed between August 8 - 21, 2017 (10 trading days). CRFSA 9,55 DMSAS -2,31 ECILC 237.457.504 The MTO price per share will be TRY 4.07 as previously determined. Money Market Previous Last Pr. Mn YE15 Energy (AKSEN.TI; OP) has announced that its Madagascar HFO O/N Repo (%) 11,80 11,83 11,85 9,50 Power Plant’s installed capacity has increased from 36 MW to 40 MW, and Euro Bond (30 year, $) 159,33 159,33 155,43 147,10 that provisional acceptance of commissioned equipment was approved by Bond (Benchmark, %) 11,6 11,60 11,36 10,94 the Ministry delegation on August 4, 2017. The company stated that the remaining 16 MW of the first phase would be gradually completed by end- Currency Previous Last Chg. YTD August 2017. The first phase, of 66 MW, is expected to create an EBITDA US$ 3,5245 3,5295 0,14% -0,23% of USD 17.6mn in 2017 and USD 45mn in 2018, as the plant will be utilized Euro 4,1465 4,1575 0,27% 12,20% for the full year. The company also stated that its Mali HFO Power Plant’s Euro/Dolar 1,1795 1,18142 0,16% 12,73% 10MW of total 40 MW installed capacity started production on August 4,2017, while the remaining 30 MW would be gradually completed by Au- Commodity Previous Last Chg. YTD gust 2017 (Positive). Oil (Brent spot, $) 52,3 52,1 -0,25% -8,13% Oil (NYMEX future, $) 49,4 49,2 -0,34% -8,67% (EREGL. TI; MP) is expected to announce its 2Q17 results Gold (Ounce, $) 1.258,0 1.260,4 0,20% 9,47% today, after the market close. We expect the bottom line to almost double, Silver (XAG, $) 16,3 16,3 -0,02% 2,23% reaching TRY 628mn in 2Q17E. We also forecast the company’s revenues Şeker Funds Previous Last* Chg. YTD rising by ca.60% YoY to TRY 4,268mn, and EBITDA improvement of ca.2.1x YoY to TRY 1,187mn in 2Q17. Market average estimates for Erde- Şeker Portfoy Equity Fund 0,457769 0,462151 0,96% 36,55% mir’s 2Q17 revenues, EBITDA and net income stand at TRY4,392mn, Şeker Portfoy Debt Instruments 0,026005 0,025984 -0,08% 5,87% TRY1,199mn and TRY811mn, respectively. Following the results an- Şeker Portfoy Money Market 1,173815 1,174181 0,03% 6,16% nouncement, Erdemir will host a conference call on August 9th at 17:00 IST Şeker Portfoy Mix Fund 0,022748 0,022844 0,42% 16,04% (15:00 UK) time. Şeker Portfoy Gold Fund 0,022055 0,021928 -0,58% 6,77% Şeker Portfoy Short T. Debt 0,014025 0,014029 0,03% 5,91%

* Prices as of 08-Aug-17

Market Watch Tuesday, August 08, 2017 www.sekeryatirim.com.tr

No Unexpected Fizz… Coca Cola Icecek’s (CCOLA.TI; OP) net profit World Indices rose 56.2% YoY to TRY 231mn in 2Q17, in line with our TRY 220mn America Previous Last Chg. YTD profit estimate and the market’s TRY 242mn profit forecast. The bottom- Dow Jones (US) 22.093 22.118 0,12% 11,92% line performed positively due to lower FX losses (TRY 38mn in 2Q17, vs. Nasdaq (US) 6.352 6.384 0,51% 18,59% TRY 57mn in 2Q16) on the back of TRY appreciation against the USD and higher operating profitability in 2Q17. On the operational front, the top-line S&P 500 (US) 2.477 2.481 0,16% 10,81% and EBITDA printed almost in line with consensus estimates. CCI recorded Bovespa (Brasil) 66.898 67.940 1,56% 12,81% consolidated sales revenue of TRY 2.559mn, up by 20.2% YoY (Cons: Previous Last Chg. YTD TRY 2.528mn; Seker: TRY 2.520mn). Consolidated EBITDA came in at Dax (Germany) 12.298 12.257 -0,33% 6,76% TRY 493mn, up by 19% YoY in 2Q17 (Cons: TRY 487mn; Seker: TRY FTSE 100 (UK) 7.512 7.532 0,27% 5,45% 472mn), with an EBITDA margin of 19.3% (-0.1pp YoY). We may see a CAC 40 (France) 5.203 5.208 0,09% 7,11% ‘neutral’ market reaction today in line with expectations. MIB30 (Italy) 21.936 22.031 0,43% 14,54% Top-line growth of 20.2% YoY – Consolidated sales volume rose by 3.6% PSI20 (Portugal) 5.253 5.276 0,43% 12,75% YoY to 373mn unit cases in 2Q17. sales volume climbed 2.9% to 181mn uc for the quarter, while international operational volume rose by ASE (Greece) 830 828 -0,20% 28,62% 4.1% YoY to 191mn uc in 2Q17. Consolidated sales revenue grew by RTSI (Rusia) 1.027 1.033 0,58% -10,38% 20.2% YoY in 2Q17, mostly reflecting the positive impact of conversion Asia Previous Last Chg. YTD from international operations, positive pricing and increase volume. Do- Nikkei (Japan) 19.952 20.056 0,52% 4,93% mestic sales revenue realized at TRY 1,175mn (7.0% YoY) due to a posi- Hang Seng (Hong Kong) 27.563 27.690 0,46% 25,86% tive packaging mix, price increases and successful promotion management Shanghai Comp. (China) 3.262 3.279 0,53% 5,66% in the sparkling category, while int’l sales revenue increased by 34.4% YoY to TRY 1,385mn in 2Q17. Net revenue per unit case rose by 16.2% YoY to KOSPI (South Korea) 2.395 2.399 0,14% 18,37% TRY 6.87 in 2Q17, on a consolidated basis. Domestic net sales per unit Sensex (India) 32.325 32.274 -0,16% 21,21% case increased to TRY 6.48/uc (4.0% YoY), while int’l net sales per unit Turkdex (Set. Price) Previous Last Chg. YTD rose to TRY 7.24/uc (29.1% YoY) in 2Q17. INX30 (AUGUST 17) 134,700 136,325 1,21% 41,60% Consolidated EBITDA printed in line with expectations – Cost per unit USD (AUGUST 17) 3,6194 3,619 -0,01% 1,49% case in international operations rose 19.5% in 2Q17 due to higher raw EURO (AUGUST 17) 4,2825 4,280 -0,06% 13,57% material prices. The quarterly consolidated gross margin contracted by 180 GOLD (AUGUST 17) 144,21 144,29 0,06% 8,24% bps to 35.9%. Consolidated EBITDA climbed 19% YoY to TRY 493mn in Portfolio Inclusio Inclusio Last Chg. BIST 2Q17, while the EBITDA margin declined 0.1pp YoY to 19.3%. Recommend. Date Price Close (%) Relative CCI maintains guidance for 2017 - In 2017, CCI expects Turkey’s volume Vakifbank 30.01.17 4,72 7,16 51,7% 15,8% to grow by low single digits, while int’l operations grow by high single digits, Tofaş 30.01.17 25,84 32,42 25,5% -4,2% and consequently foresees consolidated volume growing by mid-single İsbank 26.07.16 4,42 7,69 74,0% 16,8% digits. CCI expects net sales revenue growth to exceed volume growth, TAV Airports Holding 02.08.17 20,60 21,76 5,6% 2,6% 09.11.15 19,05 29,56 55,2% 15,8% and a flat, or slightly expanded EBITDA margin, compared to 2016. In addi- Turk Telekom 02.08.17 7,08 7,06 -0,3% -3,2% tion, the company expects a Net Debt / EBITDA ratio below 2x and capex/ 22.02.17 11,80 12,64 7,1% -13,2% sales ratio of around 8% for 2017. Portfolio Yield (yoy) 63,0% 15,7% Portfolio Yield (mom) 7,7% -0,9%

TAV Airports Holding (TAVHL.TI; OP) - TAV Airports Holding’s total Pax growth accelerated further to +17.0% YoY in July 2017 (11.5mn Pax), following a 9.1% YoY increase in June 2017. International traffic growth in the terminal operator’s biggest operation, Ataturk International Airport, has picked up to +11.0% YoY (June 2017: +5.2% YoY), with O&D traffic growth accelerating significantly to +12.8% YoY (June 2017: +2.6% YoY) in July 2017; Pax growth in the group’s international operations also suggests growth approaching 24%s. TAV’s July figures signify an expressively accelerated recovery in passenger traffic, and illustrate that the group had achieved two of its annual growth estimates/targets by 7M17, attaining a +4.9% YoY rise in its total Pax traffic (target : +4%-5%), a +1.2% YoY increase in Istanbul Ataturk International Pax traffic (target: 1%-3%), with quite a promising improvement in Istanbul Atatürk Airport O&D traffic (July 2017: +12.8% YoY; 7M17: -0.9% YoY; target: flat). We expect the announcement to reflect positively on the group’s short-term share performance. Pax traffic at TAV’s biggest operation Istanbul Atatürk International Airport continues to recover, growing by +11.5% YoY in July 2017 (June 2017: +5.2% YoY), thanks especially to the international Pax traffic rise of +11.0% YoY (June 2017: +7.0% YoY), while domestic Pax traffic growth also recovered strongly to +12.5% YoY (June 2017: +1.3% YoY). Growth in the total number of passengers served in Ankara continued to accelerate significantly to +42.3% YoY (June 2017: +20.5% YoY), due to both the increases in domestic (+41.5% YoY) and interna- tional Pax traffic (+47.2% YoY). Pax traffic in Izmir also accelerated to +13.8% YoY (June: +4.0% YoY), on a +13.2% YoY rise in domestic traffic (June 2017: +0.2% YoY), coupled with a +15.5% YoY increase in international Pax (June 2017: +20.0% YoY). The total number of passengers served in Gazipasa airport, on the other hand, grew by a meagre 1.0% in July 2017 (June 2017: +25.9%); traffic growth in this airport has yet to recover with the retrieval of tourists arriving from Germany and the Netherlands. While remaining in double-digit territory, total Pax growth at Milas-Bodrum Airport also decelerated somewhat to +11.9% in July 2017 (June 2017: +15.5% YoY). With traffic growth remarkably growing in and accelerating in Medinah, TAV’s Pax growth in its international operations (ca.16% of total Pax) also improved significantly by +24.3% YoY in July 2017 (June 2017: +15.3% YoY): TAV’s total Pax growth in Geor- gia remained quite strong at +46.7% YoY in July (June 2017: +50.4% YoY) with increasing traffic from Russia, the CIS, Israel & . Growth in the total number of Pax served in Medinah also accelerated to +27.6% in July 2017 (June 2017: +7.6% YoY). In , passenger traffic growth recovered further, reaching +10.7% YoY (June 2017: +3.7% YoY), and in Macedonia, growth also accelerated further to +15.1% YoY (June 2017: +6.2% YoY). Meanwhile, in Zagreb operations, Pax traffic growth reached +14.4% YoY in July 2017 (June 2017: +16.3% YoY).

This document has been prepared by the Equity Research Department of Şeker Invest. The information and data used in this report have been obtained from public sources that are thought to be reliable and complete. However, Şeker Invest does not accept responsibility for any errors and omissions. This document should not be construed as a solicitation to buy or sell securities herein. This document is to be distributed to qualified emerging market investors only.

Şeker Yatırım Menkul Degerler A.S. - Buyukdere Cad. No:171 Metrocity A Blok Kat 4-5 SISLI /ISTANBUL Tel: (+90) 212 334 33 33 Pbx, Fax: (+90) 212 334 33 34, [email protected]