20 May 2011

Daily Market Watch

Market Commentary
Market Figures Close Daily 1M
Global equities advanced after the announcement of better than anticipated
ISE-100, TRY 63,733 -2.5% -6.9%
drop in jobless claims data of the US local agenda looks calm today. Further
Trading Vol., TRM mn 2,849 -8% -0.5%
measures might be on the table to curb the current account deficit according MSCI EM Free 1142 0.8% -3.3%
to dailies. We might see the contribution of fiscal policies following the TRLIBOR, 3M% 8.11 0.5 bps 35.5 bps
general elections which might ease down concerns regarding possible Benchmark Bond 8.82 0.0 bps 23 bps
further pressures on the banking sector. On Wednesday, Turkish equities Eurobond -2030 5.73 1.4 bps -12.3 bps
US$/TRY 1.5819 -0.25% 4.1%
were under harsh selling pressure by flow driven activity and a few
EUR/TRY 2.2547 0.25% 0.2%
international reports highlighting concerns over Turkey’s CAD. Accordingly,
ISE 2011E P/E 11.47
underperforming most of the global markets, ISE-100 index lost 2.53% ISE 2012E P/E 10.09
closing at 63,733 level on Wednesday. Today we expect ISE to show some
MSCI Emerging Market Indices, in US$ terms
reaction to the positive performance of the global markets during the holiday
in Turkey. Opening of the market is likely to be higher around 0.5% and the 104
index should settle around 64,000 level under the current conditions. In the 102
bond market morning quotations stand flat at 8.81% and the currency is 100
stronger at 1.5730. 98
96
94
92
90
14/04/2011

21/04/2011

28/04/2011

05/05/2011

12/05/2011
MSCI EM Turkey MSCI EM
Industry News
New measures to curb the CAD might be on the table.

Corporate News & Trading Ideas

MSCI Sector Indices Best/Worst Perform ers
ENKAI TI: 1 million ENKAI shares registered to be sold in ISEBest 5 Daily Worst 5 Daily
BAGFS TI: Bagfas received US$6.5mn export order Industrl 1.3% Tech Hard&Eqp 0.0%
Consumer Discr. 1.2% Softw r&Srvcs 0.0%
SKBNK TI: Sekerbank denies knowledge of possible share sale.
Energy 0.8% Real Estate 0.0%
TAVHL TI: Tav Airports has opened new duty-free shops in Riga Utility 0.6% Pharm&Biotech 0.0%
Airport Tel. Svc. 0.6% Retail Index 0.0%

ISE-100 Best / Worst Perform ers

Calendar Best 5 Daily Worst 5 Daily
GOODY 9% BAGFS -7%
Local Calendar AYGAZ 2% EGSER -7%
20/05/2011 Program Defined Central Government Budget-April ITTFH 2% BJKAS -6%
23/05/2011 CBRT Expectation Survey (May II period) BIMAS 1% MGROS -6%
Global Calendar Exp. Pri. NTTUR 1% PTOFS -5%
20/05/2011 JN:BOJ Target Rate 0,10%
JN:All Industry Activity Index (MoM) -6,1% 0,7% ISE-100 Top 5 by Trading Volum e
GE:Producer Prices (MoM) 0,6% 0,4% Ticker Close Daily Vol. (TRY m n)
GE:Producer Prices (YoY) 6,0% 6,2% GARAN 7.04 -4.09% 410
JN:Convenience Store Sales YoY 7,7% ISCTR 5.06 -2.32% 197
EC:Euro-Zone Current Account nsa -9,5B MGROS 19.60 -6.00% 111
EC:ECB Euro-Zone Current Account SA -7,2B HALKB 11.95 -3.63% 109
BZ:IBGE CPI IPCA-15 (MoM) 0,69% 0,77% YKBNK 4.15 -2.58% 93
EC:Euro-Zone Consumer Confidence -12,0 -11,6
Please refer to important disclaimer at the end of this report. 1
Industry News
New measures to curb the CAD might be on the table. According to daily Sabah, further measures to limit the current
account deficit expansion would be on the agenda. The BRSA is likely to step into the game again. Accordingly, Ministry of
Finance would hike the special consumption tax and import duties at least within next three months in the forthcoming period.
The BRSA will put a cap on credit card limits based on earnings of each card holder. Bank specific measures might be an-
other issue being discussed. The Ministry of Finance might also elevate the incremental taxes on interest payments to di-
rectly influence the borrowing cost of individuals. Elevated down payments on mortgage loans and/or higher required level of
capital for the banks are listed as further measures those might be implemented by the BRSA. In the long term, the Govern-
ment would establish a strategy in order to curb the dependence to imports of intermediate goods and energy. We do not
expect a significant improvement on the current account deficit front in the short term. It seems CAD to GDP ratio will linger
around 8% in 2011. Variety of policy tools supported with the inclusion of fiscal policies would be addressing the issue much
better and partially release concerns regarding the predictability of pressures on the banking sector.

2
Corporate News & Trading Ideas

Enka Insaat natasoy@isyatirim.com.tr

ENKAI TI OP 25% Upside

1 million ENKAI shares registered to be sold in ISE
(TRY) Current Target
Bilgi Gulcelik, member of Gulcelik family that owns 28.1% of Enka Insaat, Price 5.96 7.45
registered his 1 million nominal shares to be sold in the ISE. The amount Mcap, mn 13,112 16,380
makes 0.05% of the total paid-in capital and 0.3% of the free float shares. FF Mcap, mn 1,573 1,966
Neutral (x) 2011E 2012E
P/E 15.95 14.91
P/BV 1.82 1.64
EV/EBITDA 9.85 9.16
(TRY) 1M YtD
Avg. Vol. Mn 4.3 9.0
Relative Perf. % 3.2 8.5

Bagfas natasoy@isyatirim.com.tr

BAGFS TI NR
Bagfas received US$6.5mn export order
(TRY) Current Target
Bagfas received US$6.45mn DAP order to be exported to Romania. The Price 161.50
amount makes roughly 4% of the company’s annual top-line. Delivery of Mcap, mn 485
the order will be done in June 2011. Neutral. FF Mcap, mn 276
(x) 2011E 2012E
P/E
P/BV
EV/EBITDA
(TRY) 1M YtD
Avg. Vol. Mn 8.6 14.1
Relative Perf. % -3.3 5.0

Sekerbank bsengonul@isyatirim.com.tr

kdoganay@isyatirim.com.tr
SKBNK TI MP 39% Upside
Seker denies knowledge of possible share sale. Following reports
(TRY) Current Target
suggesting that Bank Turan Alem of Kazakhstan may divest its 34% stake,
Price 1.52 2.11
Sekerbank denied any knowledge on any action by its shareholders on the Mcap, mn 1,140 1,580
bank, yet. FF Mcap, mn 160 221
(x) 2011E 2012E
P/E 5.70 3.85
P/BV 0.72 0.60
P/Deposit 0.14 0.11
(TRY) 1M YtD
Avg. Vol. Mn 2.2 2.4
Relative Perf. % -9.3 -11.1

3
Corporate News & Trading Ideas

TAV Airports Holding ihomris@isyatirim.com.tr

nokten@isyatirim.com.tr
TAVHL TI OP 21% Upside
Tav Airports has opened new duty-free shops in Riga Airport (TRY) Current Target
Price 7.54 9.10
Tav Airports Holding has opened new duty-free shops in Riga Airport with Mcap, mn 2,739 3,306
an investment of US$2mn for the renovation of the stores. The new stores FF Mcap, mn 1,096 1,322
will span an area of 4,650 m2 and employ more than 100 people. Please (x) 2011E 2012E
note that Tav Airports also provides the ground handling services of the P/E 19.63 13.00
airport via the the North Hub Services in which Havas (the subsidary of P/BV 2.66 2.12
TAV Airports) has 50% stake. EV/EBITDA 10.33 8.92
(TRY) 1M YtD
Avg. Vol. Mn 9.4 5.8
Relative Perf. % 6.3 4.4

New ly Announced Capital Increases/Decrease and dividend paym ents (%) Cash Dividend
Ticker Rights Issue Bonus Issue Stock Dividend Gross Dividends in Cash Ex-Date Base Price Per Share Dividend Yield
GEDIK 30% 20/05/2011 1.88 TL
GOODY 23% 26/05/2011 0.23 TL 0.37%
MRGYO 5%
TSKB 14.29% 24/05/2011

4
Currency
• EM currencies painted a mixed picture as they depreciated against the F/X Data Change (%)
USD and gained (EMs other than East Europe) value against the EUR. As of 18/05/2011 Close Daily YTD
UAH, SGD, and THB were the best performers of the day as they closed US Dollar 1.5749 0.99 -1.96
flat against the USD and HUF was the worst performer with 0.9% up
against the USD. Euro 2.2459 0.37 -8.19
• Before the holiday break USDTL had a very calm day. It traded in 1.5805- Euro/US Dollar 1.4261 0.62 6.82
15860 range parallel to EURUSD parity. USDTRY closed the day at Equal Weighted Basket 1.9104 0.63 5.97
1.5825, EURTRY at 2.2495 and TRY basket at 1.9160. TRY ended the Source: Bloomberg
day up 0,03 against the USD, up 0.26 against the EUR and up 0.15
against the basket. Daily Performance Against US Dollar(%)
1.2% BRL
• On the local front, today’s only release will be April Program Defined TRY RUB ZAR
1.0% PLN
Central Government Budget. On the international front, we have Euro-
Zone Current Account (CA), ECB Euro-Zone CA, Euro-Zone Consumer 0.8%
Confidence and German Producer Prices. CZK
0.6%
Local Bills and Bond 0.4% HUF RON UAH
INR
• Wednesday, on the eve of Youth and Sports Festival, Turkish local bonds 0.2% KZT
market painted a mixed picture on short and long maturities. Mostly due CNY
to foreign investors’ interest, Turkish notes on the long end of the yield 0.0%
curve closed the day with value gains. 10-yr maturity fixed coupon note -0.2% ARP
closed the day 16bp down at 9.46% comp. 2-yr benchmark note traded in
a narrow band of 8.74% –8.84% and closed the day flat at 8.82% comp.
• The CBRT has a weekly repo auction redemption of TL 2bn today.
• Early quotations in the new benchmark note this morning are 1 bp down
at 8.81%comp.
Eurobonds
• On Thursday, we observed a flat day for EM Eurobonds . On Wednesday
however, EM Eurobonds ended the day with value gains as the
expectations that Greece would go into a full restructuring was losing
ground. Portugal succeeded to auction EUR 1bln of 2-mo bills at yields
close to those of previous auctions. Treasury notes of Greece, Ireland
and Spain witnessed a flat day.
• On the US front, yields on the US Treasury notes closed the day flat at
3.180% as the release of the decrease jobless claims was in line with
the expectations and did not alter market’s sentiment.
• Despite Except for China, Mexico and Ukraine, EM Eurobonds posted
marginal gains throughout the day. Turkey 2030 benchmark note ended
the day 2 bp down at 5.74% comp. and Turkey 5-yr CDS is trading flat at
157/159 levels.

Recommendations
Local Rates:
• 15-01-20 Fixed Coupon Note: We continue to like the longer end of the
curve given the carry.
• Deposits versus short notes: We do not see any value in the short end of
the curve and thus recommend investors to prefer deposits instead at
levels around 8.00%-8.50%.
Eurobonds:
• 7.50% 14-Jul-17 USD (HOLD): We continue to like the issue given its
yield versus similar issues.

5
Most Traded Local Bonds & Bills
Amt Daily Weekly Last Simple Comp Yld Chg 3 mo Range 3 mo
Orig. PVBP
Instrument Maturity Term Outstd. Volume Volume Traded Yield Yield 1D Wk Low High Avg Dur. Cnvx
Term * 100
(M il TL) (M il TL) (M il TL) Price (%) (%) (bp) (bp) (%) (%) (%)
T-Bills
TRB070911T19 07/09/11 6m 6m 754 0 6 97.724 7.59 7.79 20 8.25 8.25 7.89 0.29 0.003 0.29
TRB200711T14 20/07/11 12 m 12 m 4,292 0 4 8.20 8.20 7.78 0.16 0.001 0.17

Zero Coupon Bonds

TRT200213T25 20/02/13 21 m 22 m 5,646 828 4,557 86.192 9.08 8.79 -3 16 8.20 8.86 8.51 1.69 0.048 1.31
TRT070312T14 07/03/12 10 m 5y 9,565 164 179 105.850 8.31 8.48 0 21 7.86 9.24 8.49 0.74 0.070 0.80
TRT030811T14 03/08/11 3 m 22 m 11,175 100 618 98.432 7.55 7.78 5 22 7.39 8.34 7.95 0.20 0.019 0.20

Coupon Bearing Bonds

TRT150120T16 15/01/20 8.7 y 10 y 8,798 168 327 107.350 9.25 9.46 -14 -6 9.24 9.84 9.47 5.64 0.002 6.17
TRT290114T18 29/01/14 2.7 y 3y 4,322 20 31 97.700 8.96 9.27 0 6 8.73 9.40 9.17 2.35 0.000 2.35
TRT100413T17 10/04/13 23 m 3y 7,903 15 58 102.000 8.84 9.14 12 8 8.49 9.44 9.01 1.67 0.433 1.75

This report has been prepared by “ Yatırım Menkul De erler A. .” ( Investment) solely for the information of clients of Investment.
Opinions and estimates contained in this material are not under the scope of investment advisory services. Investment advisory services are
given according to the investment advisory contract, signed between the intermediary institutions, portfolio management companies,
investment banks and the clients. Opinions and recommendations contained in this report reflect the personal views of the analysts who
supplied them. The investments discussed or recommended in this report may involve significant risk, may be illiquid and may not be suitable
for all investors. Investors must make their decisions based on their specific investment objectives and financial positions and with the
assistance of independent advisors, as they believe necessary.

The information presented in this report has been obtained from public institutions, such as Istanbul Stock Exchange (ISE), Capital Market
Board of Turkey (CMB), Republic of Turkey, Prime Ministry State Institute of Statistics (SIS), Central Bank of the Republic of Turkey (CBT);
various media institutions, and other sources believed to be reliable but no independent verification has been made, nor is its accuracy or
completeness guaranteed.

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