20180123-法国巴黎银行-Morning_Meeting_Notes_9页_461kb

Summary of EM STRATEGY | TURKEY DESKNOTE

Core Content

This document provides an overview of the Turkish financial market situation as of 23 January 2018, with a focus on the Treasury auctions, credit guarantee fund (CGF), and the implications for GDP growth and credit impulse. It also includes market data and legal disclosures for the purpose of emerging markets strategy.

Main Points

• Treasury Auctions:

  • The Treasury auctions attracted solid demand, with a bid-cover ratio of 2.2 for the newly issued 5-year fixed coupon bond, which is in line with the average ratio from the past two years.
  • The average yield at the auction was 12.61%, slightly lower than the old 5-year bond yield of 12.74%, due to the longer maturity and an inverted yield curve.
  • The Treasury will issue TRY 3.1bn in non-competitive sales and has a plan to issue TRY 2.8bn in 10-year fixed coupon and 10-year CPI linker bonds today.
  • Next month, the Treasury is expected to issue TRY 19.6bn, including TRY 1.9bn of rent certificates, with auctions scheduled on 12-13 February.

• Credit Guarantee Fund (CGF):

  • A protocol was signed to use TRY 55bn of CGF guarantees, which had previously contributed around 2pp to the 7% GDP growth.
  • Despite the increased guarantees, the document forecasts a slowdown in loan growth from 20% in the previous year to a lower rate in 2018, leading to a negative credit impulse.
  • The expected GDP growth for 2018 is 4.0%, unless additional measures are taken to boost loan growth above 20%.

• Credit Impulse and GDP Growth:

  • The CBRT analysis indicates that a 1pp decline in loan growth leads to a 0.14pp lower GDP growth in the following two quarters.
  • The cumulative impact on GDP is more pronounced when the credit shock comes from both internal and external factors.
  • The document estimates that the increase in loan growth this year will have a cumulative impact of 1-2pp on GDP growth, likely closer to the upper bound due to favorable internal and external conditions.

• Market Data Overview:

  • Foreign Exchange Market & Swap Market:
    • USDTRY: 3,7841 (down -0.6% daily, -0.4% weekly)
    • EURTRY: 4,6401 (down -0.3% daily, -0.3% weekly)
    • BASKET: 4,2116 (down -0.5% daily, -0.4% weekly)
    • ATM vols: 1m (12.03%), 3m (12.28%), 1y (13.46%)
    • Forward implied and XCCY swap rates are also provided for different maturities.
  • Local Bonds & Eurobonds:
    • Local Government Bonds: 2Y (13.50%), 5Y (12.68%), 10Y (12.15%)
    • Sovereign Bonds: 5Y (97.6), 10Y (85.9), 17.02.2045 (106.9)
    • CPI Linkers: 2Y (10.18%), 5Y (9.63%), 10Y (9.04%)
    • Corporate Bonds: Isctr 2021 (101.0), Garanti 2022 (102.2), Akbank 2025 (98.3)

Key Information

• The credit impulse is expected to turn negative in 2018 due to slower loan growth, despite the expansion of the CGF.
• The document emphasizes the importance of maintaining a credit impulse to achieve the targeted GDP growth.
• Legal notices and disclaimers are included to highlight the non-independent nature of the research, potential conflicts of interest, and the lack of liability for any use of the information.
• The document serves as a marketing communication and is intended for professional clients and eligible counterparties.
• It is not investment research and does not constitute an offer to sell or purchase any financial instruments.
• The information is based on public sources and is subject to change without notice.
• BNP Paribas may have financial interests in the issuers or securities discussed and may engage in transactions that conflict with the views expressed in the document.
• The document includes important disclosures for options, ETFs, and convertible securities, emphasizing the risks involved and the eligibility of investors.

Legal and Regulatory Context

• The document is non-independent research and may be subject to conflicts of interest.
• It is not intended to provide investment, financial, legal, or tax advice.
• The information is for informational purposes only and does not guarantee accuracy or completeness.
• The document is subject to various legal regulations and is only available to certain qualified investors.
• BNP Paribas and its affiliates may be involved in the market-making or advisory roles related to the securities discussed.
• The document includes disclaimers regarding the use of simulated performance data and the lack of liability for any reliance on the information.

Conclusion

The document outlines the current state of the Turkish financial market, highlighting the role of the Treasury auctions and the CGF in influencing credit and GDP growth. It provides market data and forecasts, while also emphasizing the legal and regulatory framework surrounding the information, ensuring transparency and compliance with relevant financial regulations.