Buy - Sell

·         TRADE DEFICIT (DEC) > TEB-BNPP and Cons @ -$9bn. If in-line 12-month cumulative @ -$53.2bn. We reckon adjustment in S/A terms has come or is close to an end.            

 

·         GARAN (HOLD, TP TL10.81) > 4Q12 results today. TEB-BNPP NI @ TL857m, Cons @ TL843m. We expect GARAN to lose mrkt share in loans and deposits but to post sector-best 70bp q/q improvement in loan-deposit spread. Spread improvement was postponed from 3Q12 for 4Q12 combined with strong CPI-linker contribution. For full earnings preview see page 3 of http://www.bnppresearch.com?E=cdjjgkbbbii

 

·         EKGYO > Emlak Konut tendered its Ayazma 3^rd stage project. There were only two bidders => indicating a rather weak demand when considered around 20 bidders in Kartal tender last year.  Highest bid came from Makro Construction @ TRY300m where Emlak’s share is 20% (TRY60m). There will be a second phase of the tender in the near future where Emlak will proceed with an open auction.

 

TCELL > Y/day the Privy Council revealed its ruling re the disputed controlling 13.8% Tcell stake => Alfa was entitled to appropriate the mentioned stake; but also, Cukurova is entitled to relief in equity from forfeiture of shares based on appropriate conditions, which are yet undetermined. The Court said that it has insufficient information to determine the precise terms upon which relief from forfeiture should be accorded to Cukurova. After receiving related submissions, it will give a further decision. All in all, the Privy Council gave Cukurova the right to get its shares back from Alfa in return for the related debt amount ($1.35bn, unpaid part of $1.7bn loan) and an add compensation btw $155m-$950m. We calculate the late-payment interest at $387m and $553m, based on the annual int rate of the loan (LIBOR+8%) and the default int rate (LIBOR+11.5%), respectively. However, according to the reasoning of the verdict, Cukurova did not act in bad faith considering that they kept the early pymt in an escrow account for 3-yrs => a more reasonable int rate likely => If LIBOR+2%, then we come up with a US$125mn total int. Then, the total amount to be paid by Cukurova would be in the range of $1.6bn-$2.4bn vs the current $1.9bn implied Mcap of the mentioned stake. Note that, in addition to this, Cukurova is also obliged to pay $1.3bn to TeliaSonera for violating TeliaSonera’s first right of buying during the stake self-off to Alfa. It is also unknown whether Karamehmet, Cukurova’s major shareholder, is financially capable of all these payments (in the $2.9bn-$3.7bn range) or if he is willing to pay an additional compensation amount. Uncertainty re the shareholder structure is likely to continue for some more time.