Buy - Sell

·         C/A DEFICIT (NOV) > TEB-BNPP & Cons @ -$4.8bn, if inline 12-mth cum @$52bn from $53.1bn. Adj coming to an end we reckon. We expect the deficit to widen slowly from here on out.

 

·         BANKS > Will provide verbal defence in ongoing investigation re alleged loan and deposit rate fixing on 25 Feb 2013, the Competition Auth announced yesterday. Final verdict within 15 days of this date. according to local dailies. Process proceeding in-line with expectations and previous announcements. We think the fines could avg around TL200m/bank based on a 2% fine on 2011 gross rev, which would mean avg hit of 1% on BV, 15bp on CARs and 6% on pre-tax income for the Big-6.

 

·         TRKCM (NR) > signed an agreement to acquire 45% stake in HNG Float Glass Limited (HNGFL) of India => 88% subsidiary of Hindustan National Glass & Industries Limited (HNGIL) => one of the largest packaging glass producers in India. Remaining stake of HNGFL is owned by IFC => will be reduced to 10% post acquisition. TRKCM announced in Oct’12 that it signed an MOU with HNGIL to enter Indian flat glass mkt & take approx 44% stake in HNGFL. Pricing & schedule of deal not announced.

 

·         TTKOM (BUY; TP: TL7.46 ) > Reportedly, the PA applied to Min of Transp for the sale of Treasury’s 6.68% stake in TTKOM (normal procedure). Gov will approve sale & decide on roadmap. Currently, Treasury owns 31.68%, which will decline to 25% after sale. Note Oger Telco owns 55% & free float @ 13.32%.   

 

·         FROTO (HOLD; TP: TL18.80) > will give 2013 guidance today. We forecast export unit sales @ -2.7% y-y & +5.8% y-y in domestic unit sales, assuming total domestic LV market @ +4.5% y-y. Curious about export guidance due to transition of Transit Connect prod to Spain.

 

·         THYAO (BUY, TP TL7.30) > According to a Lufthansa official, the co is interested in better utilizing THYAO’s flights to Mid East & Asia out of Istanbul, and that it would be advantageous for THYAO to better utilize Lufthansa’s flights to North America in return so that the two cos could compete better against carriers like Emirates. Comment: We have heard similar statements before. Would imply a more wide-ranging code sharing agreement. We are unsure if such a deal would significantly improve THY’s prospects or whether mgmt would look favourably on it, as the airline is doing well in NA and plans to significantly expand capacity there. Other news > Announced that it started collective wage agreement negotiations with the union for the 2-yr period starting 2013. Comment: We expect negotiations will be settled with increases sl above inflation for the next 2 years.