Buy - Sell

·         TREASURY AUCTIONS > 2Y benchmark and 10Y fixed coupon bond auctions today. Plans to raise TRY9.5bn in August, including the 15m bond and 7y FRN auctions in the last week of the month. Demand for the 5Y fixed coupon and 10Y CPI linker bonds yesterday was strong. The latter we believe saw decent international interest given inflation concerns

 

·         SNGYO (NR) APPLIES TO CMB KEEP SHARES BOUGHT IN BUYBACK > Applied to CMB to keep its shares bought three years ago in a share buy-back program. New Turkish Commercial Law removes time restriction on re-sale of share in buyback if the amount is smaller than 10% of total number shares outstanding.

 

·         KRDMD (BUY, TP TL1.38) SIGNS CONTRACT FOR TRAIN WHEEL PROD UNIT > Signed contract with German Schuler Group for construction of a train-wheel production unit with 200k/year capacity. Announced it would sign such a contract a month ago. Expects the unit to be completed in 32 months. No further details given but GM had reportedly said the investment could cost $130m-$140m.  Comment > This is only a minor development, as the project had been announced last month. Somewhat good news, as is first concrete step taken in expanding high margin railway components business. Yet, we are wary about its potential contribution to valuation.

 

·         DOAS (HOLD, TP TL10.7) > DOAS is still assessing the potential impact on operations of a hailstorm in Germany which damaged 28,000 new VW vehicles at the Woflsburg plant where VW produces the Golf, Tiguan and Touareg models. We believe there could be some delayed deliveries or some lost volume for DOAS. We would estimate the impact not to exceed 1-2% of 2013 vol of Dogus Otomotiv in the worst case. Marginally –VE.  

 

·         GOV’T REGULATION TO FAVOUR LARGE MEAT PRODUCERS, TATKS (HOLD, TP TL2.57) / Pinar Et > New government regulation enacted last March which raises input costs for meat producers remarkably will force some large meat processors who mainly compete on lower prices on cheap products to exit the industry, according to daily Taraf. Comment > Consolidation in the meat processing segment will help large players grab higher market share and become more profitable in the medium term.

 

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