Buy - Sell

·         CONSUMER PROTECTION LAW: Reportedly, the revised consumer protection law that seeks to regulate banks’ fees and commissions will be sent to the Prime Ministry in Dec. Recall the initial draft prepared by the Ministry of Customs and Trade suggested abolishment of all fees and commissions, which is obviously not sensible and is being heavily lobbied against by banks. The Parliament has formed a subcommittee to review banks’ fees and commissions, compare them to international practices and later publish a report; and the BRSA’s head recently said that banks “do not” charge excessive fees detrimental to consumers but “further transparency and some standardisation could be possible.” We believe some middle-ground will be found. Still, potential measures we believe could still wipe away up to 5% of banks’ annual earnings. A restrictive regulation targeting credit cards, in particular, would hurt banks with larger credit-card businesses (i.e. YKBNK, AKBNK, and GARAN).

 

·         GARAN (BUY, TP: TL9.86): GE registered its remaining 39.3m shares (TL326m) in GARAN with the Central Registry Agency (0.9% of total shares outstanding & 1.9% of free float, 1.1x of last 3m daily avg vol). Recall GE had registered c.55m shares on May 6, 2011, and while cannot be confirmed, custody & stock data suggest those shares have already been sold in early Aug’11 (c.3 m after registration) => in the 1 wk following the registration it u/p the banking index & ISE-100 by 2% & 4%, resp, after which it recovered => temporary u/p may be expected.

 

·         THYAO (BUY; TP TL5.67) > Turkish Airlines CEO says the airline could announce an order for 100 narrowbody aircraft this yr or early next according to Bloomberg without giving any further details such as the time span for the order or exact aircraft likely to be ordered. Comment: We est THYAO is considering placing such an order in order to expand its capacity in the long-term and grow faster than peers => We est the order size @ $8b at list prices, but THY is likely to get a substantial discount such as 40% for such a sizeable order. If placed, we would exp deliveries to start earliest in 2014/15=> likely to be spread over a # of yrs. Despite its size, the net impact on our projections for THY’s long-term capacity would depend on the delivery schedule and how quickly THY may prefer to sell / retire its existing fleet in the yrs ahead. We already f/cast 60% growth in THY’s fleet to nearly 320 aircraft by 2020 (200 end-2012) while estimating the avg fleet age to rise to 7.5 yrs by end-2020 (from an est’d 6.0 yrs by end-2012). We est, for example, THY would need to acquire nearly 150 aircraft (of which 100 is est’d to be narrowbody passenger aircraft) btw 2015 - 2020 in order to facilitate such growth and maintain a relatively young fleet age.

 

·         UYUM (HOLD; TP TL3.45) > According to Haber Turk, Uyum Gida could not agree with Tesco Kipa for the majority stake sale in the company. The news also says that Uyum is now in talks with Makro Market (a supermarket chain with 165 stores in Turkey) and the deal could be finalized soon. Separately, in an official announcement, the company has mandated Balikli Consultancy Company to evaluate potential partnerships with strategic investors and corporate investment funds.