Market Watch (Şeker Yatırım)

The BIST 100 Index started Monday on a positive trend, which it maintained to settle above 11,000 later in the day. The Benchmark Index closed at 11,038.32, up 0.69%. The Industrial Index rose 0.52%, while the Banking Index diverged negatively, down 0.06%. Expectations that the CBRT would continue its interest rate cuts plus the generally better-than-expected 2Q earnings figures are helping maintain the uptrend at the BIST. Globally, risk appetite was generally weak yesterday. The U.S. stock markets closed lower ahead of today's CPI data, which will shape expectations regarding the Fed's September interest rate decision. European stock markets, excluding the UK, closed lower. This morning, U.S. futures were mixed, while German DAX futures and Asian stock markets were generally bullish. The VIOP-30 Index closed the evening session flat, up 0.06%. Today, markets will be watching the U.S. CPI data abroad and June balance of payments data domestically. Market expectations are for a current account deficit of USD 1.45 billion. We anticipate a current account deficit of USD 1.32 billion. Locally, we expect the Benchmark Index to start Tuesday positively, and maintain its outlook if any profit-taking is offset during the uptrend. SUPPORT: 10,850 - 10,750 RESISTANCE: 11,100 - 11,250.

Money Market:

The Lira was negative Monday, weakening 0.18% against the USD to close at 40.7275. The currency also depreciated by 0.23% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were positive. The ten-year benchmark bond yield fluctuated between a range of 31.17%-31.27%, closing the day at 31.21%, down 22 bps from the previous close.

Domestic Headlines:

*** The balance of payments statistics for June will be released domestically today. Market expectations are that the current account balance will show a deficit of USD 1.45 billion. As Seker Invest, we expect a current account deficit of USD 1.32 billion. Our detailed analysis will be published later today.

*** Industrial production (IP) increases by 0.7% month-on-month and 8.3% year-on-year in June. We continue to expect a gradual rise in IP momentum following interest rate cuts… According to industrial production index data, seasonally and calendar-adjusted production increased by 0.7% in June compared to the previous month. Thus, annual production rose by 8.3% (previously 5%). Since the beginning of the year, our base scenario for industrial production data has been for a strong recovery accompanied by interest rate cuts. Although local and global developments in the March-April period disrupted this expectation, the momentum of production remains strong. In the same baseline scenario, we expected the recovery in production data to become more pronounced in the second quarter of the year. Due to the impact of these external shocks, we have revised our expectations for production data by one quarter. Given the current outlook, monthly data continues to fluctuate and remain flat. However, positive stability is an indication that the worst is behind us in terms of production. On the other hand, annual data has risen steadily since February due to base effects, reaching 8%. If the monthly data remains flat, we believe that we are testing the peak levels of the annual data. The annual data for industrial production is at the 10-year average of 5%. The negative outlook in the output gap was a result of tight monetary policy. For the rest of the year, we expect a calm monthly trend and a negative output gap in annual production. The interest rate cuts that began in July have had a tolerable effect on companies' financing costs. We expect this outlook to prevail for the rest of the year, and companies with high TL debt burdens to be positively affected by this process. As developments in monetary policy will indirectly impact on industrial production expectations, we expect the momentum in production data to remain on a positive trajectory, with interest rate cuts expected to continue until the end of the year.

The CBRT, which began its interest rate cut cycle in July, gave the real sector a much-needed breath of fresh air. Positive developments in the inflation outlook are opening up room for maneuver for the central bank. Although the fact that interest rate cuts are inflation-focused and meeting-based indicates that risks persist, developments on the price side are limiting these risks. The inflation outlook for the last three months shows that significant progress has been made toward the disinflation target and that there is room for a total of 1,000 basis points of interest rate cuts by the end of the year. If the CBRT narrows the real interest rate spread, this reduction could be even more enthusiastic. Interest rate cuts from the European Central Bank could also boost production for the main export market. The resolution of global concerns and the improvement in the inflation outlook could prompt updates to our expectations. A negotiated solution to the tariff wars seems imminent. We see this expectation strengthening in global markets and production data. If there is no supply-side pressure from this area, domestic production data will also adapt to this new situation over time. We expect economic activity to take on a more vibrant appearance in the remainder of the year.

Company News:

Coca Cola Icecek (CCOLA.TI; OP) reported a consolidated net profit of TRY 5,051mn in 2Q25 (2Q24: TRY 7,304mn), marking a 31% YoY decline, exceeding both the RT consensus estimate of TRY 4,889mn and our forecast of TRY 4,759mn, based on inflation-adjusted (IAS 29) financials. The YoY decline was primarily attributable to a modest contraction in sales revenues and a sharp reduction in net monetary position gains (2Q25: TRY 1,556mn vs. 2Q24: TRY 3,326mn). Partially offsetting these pressures were a 16% YoY drop in net financial expenses (2Q24: -TRY 3,479mn vs. 2Q25: -TRY 2,928mn) and lower current tax expenses compared to the same quarter last year, both of which provided some support to the bottom line.

In 2Q25, CCI’s consolidated sales volume expanded by 4.7% YoY to 473 million-unit cases (2Q24: 451 million-unit cases). In Türkiye, volumes contracted 5.0% YoY to 161mn unit cases (2Q24: 169mn uc), reflecting the shift of the Eid holiday into 1Q and the impact of weaker consumer purchasing power. Within the Türkiye operations, the share of IC packages increased 0.8pp YoY to 33.8%, while the on-premise channel’s share expanded 1.7pp to 32.2% in 2Q25. Int’l operations delivered 10.6% YoY volume growth to 312mn unit cases, despite macroeconomic instability in Bangladesh, and geopolitical tension & the shift of Eid into 1Q in Pakistan, supported by robust demand in other markets. On a consolidated basis, the IC package share declined 1.1pp YoY to 28% (due to base effects), whereas the on-premise channel share rose 2.2pp to 31% in 2Q25.

CCI’s consolidated net sales revenue contracted by 2.6% YoY to TRY 48,142mn, slightly below both the market consensus forecast of TRY 48,907mn, and our forecast of TRY 49,036mn, negatively impacted by limited or postponed price increases in int’l markets, and the negative accounting impact of inflation adjustment. The consolidated gross margin contracted 2.7pp YoY to 35.4% (2Q24: 38.2%), driven by lower volumes in Türkiye and base effects. CCI’s EBITDA declined 17.6% YoY to TRY 8,940mn (2Q24: TRY 10,846mn), broadly in line with expectations (RT consensus: TRY 9,067mn; Şeker Invest: TRY 9,211mn), with the EBITDA margin compressing 3.3pp YoY to 18.6%.

As of 2Q25, CCI’s net debt stood at USD 885mn, with a Net Debt/EBITDA ratio of 1.36x (2024: 1.02x). The company’s FCF deteriorated to TRY -5.6bn in 2Q25, primarily due to elevated CapEx related to greenfield and production line investments (Neutral).

Migros (MGROS.TI; OP) is to announce its 2Q25 results after the close of the TR markets. For 2Q25, we expect net sales of TRY 92,014mn (Research Turkey market average expectation: TRY 92,100mn). On the EBITDA side, the average market expectation is TRY 5,197mn, while our expectation is TRY 5,255mn. As a result, we expect the Company to print a net profit of TRY 942mn (RT market expectation: TRY 1,006mn).

Pegasus (PGSUS.TI; OP) is to announce its 2Q25 results after the close of the TR markets. For 2Q25, we expect net sales of EUR 882mn (Market average expectation: EUR 878mn). On the EBITDA side, the average market expectation is EUR 246mn, while our expectation is EUR 248mn. As a result, we expect the Company to print a net profit of EUR 135mn (market expectation: EUR 136mn).

 

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