Buy - Sell

·         TREASURY REDEMPTIONS > $9.7bn this week. BOND AUCTION => 10-year CPI-linked and 4-year fixed today, 2-yr benchmark and 10-year fixed coupon tmrw.

 

·         INDUSTRIAL PRODUCTION (NOV) TMRW > TEB-BNPP +13% y/y, Cons +10% y/y on more working days in Nov.

 

·         CAD (NOV) FRIDAY > TEB-BNPP @ -$4.8bn, if inline 12-month cumulative @$52.5bn from $53.1bn

 

·         DEC AUTO SALES > Acc. to unofficial figures domestic LV sales in Dec reportedly @ ~115k units (-10% y-y), close to our 113k est => makes 2012FY @ 777k unit sales (-10% y-y), close to FROTO’s guidance of 778k units, but slightly below TOASO’s guidance of 790k units. Neutral.

 

·         TR DEC 12 AIRPORT TRAFFIC; TAVHL (BUY; TP TL13.80) > Airport terminal traffic rose 13% y-y to 8.2m passengers in Dec’12 (9% y-y in Nov, YTD 10%y-y) => domestic and int’l 6% and 23% y-y, resp’vely. LFL pass traffic growth at terminals operated by TAV Airports in TR excl’g domestic terminal at Izmir, was unchng’d at 16% y-y in Dec (Nov 16% y-y). Headline growth => i.e. incl’g domestic terminal at Izmir @ 31% y-y (Nov 30% y-y, YTD 32% y-y). Comment: Acceleration in Dec seems to be mainly due to unusual growth in # of intn’l pass at Sabiha Gokcen => there might have been some restatement of data for previous months, making Dec’12 #s for that particular airport significantly stronger than otherwise. With Sabiha Gokcen excluded, overall growth trend continues to be strong and in line with our est. Both TAV Airports and Turkish Airlines are expected to announce their passenger traffic data for Dec latest by next week.

 

·         THYAO (BUY; TP TL7.30) > Chairman tells local newspaper that the airline was aiming to close 2012 with nearly 39m passenger and $8.1b rev. Comment: The chairman’s # of pass guidance is in line with our est but revenue figure notably below our est of c$8.5b. If true, would imply THY’s margins might be significantly weaker than we exp in 4Q12. Yet, given the progress THY showed in improving its yields in 2Q12 and 3Q12, this much weakening in one quarter would be quite surprising. Will check with Co for clarification.

 

·         KRDMD (BUY; TP TL1.55) > Sl. incr’d list prices for some products (debars, rounds and sections) effective Dec. 14. Comment: We est the incr in the Co’s weighted avg list price @ about $5/tonne (1%).  Likely to affect rev with a lag of 1-2 wks. Think Kardemir’s incr is a reflection of the overall sl. upward trend in long steel prices in recent weeks <= based on rising raw material costs, especially iron ore.

 

·         ENKAI (BUY, TP: TRY5.60) > Acc. to Bbberg, citing Zagreb-based newspr, Montenegro is in talks with China’s Poly Group, Bechtel & EIB to build a 170-km highway from Bar on Montenegro’s Adriatic coast to Serbian border => have been hearing news re Bechtel-Montenegro talks since late 2011. If Bechtel wins, ENKAI is likely to partner. Highway would be built on mountainous terrain => would be costly. Using Romanian highway project of Enka as benchmark => potential size €2.3b (€1b using Enka’s Kosova highway project as benchmark). If Bechtel wins, +VE for ENKAI but project might face significant challenges in financing, considering size of Montenegro’s economy.

 

·         PNSUT (NR)/TATKS (HOLD, TP TL2.27) => Gov’t will establish a Meat and Milk Price Stabilization Body to prevent potential volatility in meat and milk prices. Beneficial for both sectors which suffered significantly from fluctuations in prices. Raw milk prices are on the rise due to cost pressures and relatively lower supply after remaining under pressure until recently. With new body, milk processors will have more stable input prices, and adjust their product prices accordingly.