Buy - Sell

Howdy doody folks! As an old cowboy sayin’ goes: “The quickest way to double your money is to fold it over and put it back into your pocket.” Wisdom that might come in handy over the next few months y’all. The recent correction is perhaps just a glimpse of more to come, courtesy the US rate scare; making what transpired over the last few days look like child’s play. Not the time to be dipping in your toes, ladies and germs. Resist temptation! Any hint the Fed is looking to scale down its funny-money printing scheme is likely to bamboozle consensus.

·         GARAN (HOLD, TP TL10.80) > Customers pulled TL35-40m of deposits and cancelled 1,500 credit so far, CEO of GARAN said in a newspaper interview. Dogus Holding is GARAN’s parent company. Comment > Given the TL95b deposit and the 8.5m credit cards, the withdrawn amount and number of cancelled credit cards is negligible. Although some may follow in the coming days, we do not expect a major -VE impact on GARAN financials.

 

·         BIMAS > Abdulrahman El Kheiriji registered 1.518m BIMAS shares to the central custody (1% of paid in capital). Kheiriji owns 4.5% of BIMAS shares. Possible share sale by Kheiriji can create some pressure on the price, but we do not expect the impact to be long lived.

 

·         TKFEN (HOLD, TP TL7.90) > Petrol Is union communicated its decision to start a strike on June 26 to Kiplas, the union of chemical, petroleum, rubber and plastic employers, which Toros Tarim is a member of following disagreement during the collective bargaining process for 2013-2014 period. The negotiations between Petrol Is and Kiplas continue. During a similar disagreement in 2011, the strike decision was not implemented as unions finally came to an agreement. In 2009, the strike lasted for a month. Employee costs account for <5% of total cost of Toros Tarim (33% of Tekfen Holding’s NAV).  Comment > Although a possible strike can cause short-term supply disruptions, we do not expect a major impact on TKFEN.

 

·         TURKISH TOURISM AFTER PROTESTS, THYAO (BUY, TP TRY9.69)/TAVHL (BUY, TP TRY15.81) > On-going protests have not resulted in a high number of cancellations in hotels and holiday resorts in TR so far, according to the head of a local tourism industry association. The association said hotels in Taksim neighborhood in Istanbul had experienced cancellations of up to 30% but cancellations in other hotels in the rest of Istanbul and especially the rest of the country were limited so far. They warned that were the protests to continue (as intense as they have been) or widen, it may start having a -VE impact on bookings in TR overall for 2013. Another industry representative said, bookings in Istanbul seemed to be affected more -VEly than those in rest of the country because foreigners coming to Istanbul had shorter stay periods than those coming to other tourism centers such as Antalya and protests in most cities took place peacefully. Comment > We think it is a bit too early to make a sound prediction about how the tourism and aviation industries in TR might be affected by the recent events. Yet, the issue seems to warrant a close watch.