HALISTER1: Turkish Stocks Attractive for JPMorgan, With Arcelik Overweight

Turkish Stocks Attractive for JPMorgan, With Arcelik Overweight

(Bloomberg) -- The external macro environment “is turning less hostile for EM and Turkey’s macro now appears to be turning,” JPMorgan analyst Hanzade Kilickiran writes in research report.
  • Sees Turkish stocks attractive w/ 31% discount to the MSCI EM Index
  • Says improving earnings per share momentum offers an “opportunity for investors to reassess risk and reconsider investing in Turkish equities”
  • Prefers companies partly or fully hedged against currency while offering strong exposure to potential rebound in domestic demand
  • Macro risks seen “contained” and growth, currency and yield related concerns not “morphing into a macro crisis”
  • Expects growth to be supported by cyclical factors, fiscal stimulus and release of pent-up demand after constitutional referendum in April
  • Positive on white goods, cautious on auto industry, negative on consumer industry
  • Initiates Arcelik and Tofas Oto at overweight; Ford Otosan at neutral
    • Arcelik +2.2% as of 11:29am in Istanbul
  • NOTE: Arcelik Climbs Most in 10 Days, JPMorgan Initiates at Overweight
  • Upgrades Ulker to overweight; shares +1.2%
    • Says prefers Ulker within sector; “shares’ underperformance undeserved with management delivering on structural growth”
  • Downgrades Coca Cola Icecek to Neutral; stock drops 1.7%
    • Weak 4Q numbers seen suggesting downside risk on earnings estimate remaining

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ARCLK TI (Arcelik AS)
CCOLA TI (Coca-Cola Icecek AS)
FROTO TI (Ford Otomotiv Sanayi AS)
TOASO TI (Tofas Turk Otomobil Fabrikasi AS)
ULKER TI (Ulker Biskuvi Sanayi AS)

People
Hanzade Kilickiran (JP Morgan Securities PLC)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: Direct Line Rises to One-Month High as JPMorgan Upgrades

Direct Line Rises to One-Month High as JPMorgan Upgrades

(Bloomberg) -- Direct Line Insurance rises as much as 3.5% to 353p, highest since Feb. 24, on almost 3x 20-day average volume.
  • JPMorgan upgrades to overweight as underperformance after Ogden rate cut looks increasingly disproportionate, analyst Edward Morris writes in note
  • Co. has strong brands, conservative balance sheet and long- term expense opportunity
  • Direct Line now top pick in U.K. non-life sector
  • JPMorgan downgrades eSure and Hastings to neutral due to valuation despite their more favorable earnings trajectory
    • Hastings -2% on Friday; eSure -0.6%

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
DLG LN (Direct Line Insurance Group PLC)
ESUR LN (esure Group PLC)
HSTG LN (Hastings Group Holdings PLC)

People
Edward Morris (JPMorgan Chase Bank NA)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: Rand Assets Tumble After Zuma Fires Gordhan: Inside S. Africa

Rand Assets Tumble After Zuma Fires Gordhan: Inside S. Africa

(Bloomberg) -- Rand -1.3% to 13.4613/USD as of 8:59am in Johannesburg, weakest since Feb. 9, after South African President Jacob Zuma fired Finance Minister Pravin Gordhan late Thursday and replaced him with Malusi Gigaba, who has no financial or business experience.
  • ZAR heading for 5th day of losses, worst streak since Aug.; -7.6% this week, -2.4% this month
  • USD/ZAR one-month implied volatility soars 364bps to highest since Nov. 30
  • South African benchmark local bond due Dec. 2026 tumbles, yield rises 42bps to 8.93%, biggest one day gain since Aug. 24
    • Morgan Stanley recommends selling the bond, saying the yield could rise between 40bps and 50bps today
    • “The market has priced in some of the political uncertainty since Monday, but we expect more short-term weakness,” strategist Min Dai says in note to clients
    • “We turn bearish on SAGBs and add South Africa local bonds to our dislike list”
  • Yield on South Africa’s Eurobonds due April 2026 +18bps to 4.84%, heading for biggest rise since Dec. 15
    • South African 5-year CDS little changed at 191bps
  • Johannesburg Stock Exchange says it will adjust price bands in expectation of increased volatility
  • WATCH: Razia Khan, chief economist for Africa at Standard Chartered, discusses Gordhan’s firing
  • READ: Zuma Ally Malusi Gigaba Faces Rating Threat, Independence Doubts
  • READ: More Pain in Store for Rand After Worst Slump Since 2015: Chart

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jacob Zuma (Republic of South Africa)
Malusi Gigaba (Republic of South Africa)
Pravin Gordhan (Republic of South Africa)
Min Dai (Morgan Stanley)
Razia Khan (Standard Chartered PLC)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: INDIA RATINGS: Zodiac Clothing Downgraded to A1

INDIA RATINGS: Zodiac Clothing Downgraded to A1

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.
  • To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery
DOWNGRADE
  • Zodiac Clothing
    • Short-term fund-based limits cut to A1 from A1+ at ICRA
    • Cites weak business, financial performance

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ZDC IN (Zodiac Clothing Co)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283