Buy - Sell

·         REITs: Reportedly, Finance Minister Simsek says the ministry is working on the removal of corporate tax exemption on REITs => currently exempt from corporate tax. The removal or change in exemption has been speculated for a long time but this is the 1st time that a govt official is public talking about it.

 

·         BANKING SECTOR > Daily Sabah suggests that the Competition Board could fine banks up to TL4.8b in total as a result of its ongoing investigation into alleged loan & deposit rate fixing. Comment: We think there is no substance to the newspaper’s own calculation of potential fines. Our view => fines could avg c.TL200m per bank based on a fine of 2% on 2011 gross revenues. Recall that the head of the CB stated that the investigation is likely to continue until March 2013.

 

·         TRKCM (NR): According to Haberturk, quoting Finance Minister Simsek, expenses related to improving home isolation & energy efficiency will be tax deductible for landlords. No further details. Initial read => slightly +VE, will follow-up with company. Separately, as per request of TRKCM, Ministry of Economy started anti-dumping investigation on flat glass imports from Romania => incr’g imports from Romania has impacted flat glass pricing in domestic market –VE’ly.

 

·         TTKOM (HOLD; TP TL7.44) > TTKOM signed an agreement with KPN Group in Belgium to launch “Turk Telekom Mobile” in the Belgian market. KPN already had a brand called “Ay Yildiz” (targeting the Turkish community in Belgium), which will change into “Turk Telekom Mobile” => TTKOM and its mobile operator Avea will offer lower roaming prices. Comment: +VE but not significant. Belgium has a population of 11m and the # of Turks is est at 210K. Ay Yildiz was already covering the majority of Turks. Details not revealed yet , but we think it could probably be based on a revenue sharing model.

 

·         TCELL (BUY; TP TL11.11) > According to daily Haber Turk, Evgeny Dumalkin, VP of Altimo, says they would remain a shareholder in Turkcell for the long term even if they lose the legal case against Cukurova. He added that they expect the court case to be finalized around end-2012 or beg-2013. If Cukurova wins the case, the exit of Altimo would be one of the favorable scenarios for a more harmonic shareholder structure in Turkcell. Nevertheless, we don’t believe the market assigns high likelihood to this scenario.