Strategy Note - 2025 2H Outlook

2H25 Outlook – What we hoped for & what we found

At the beginning of 2025, in Türkiye, we anticipated an easing of domestic interest rates, an acceleration of growth and an improvement in financials. At present, CBRT policy rate is approximately 1,000 basis points higher than expected. Risks of a loss of growth momentum have increased, and the financial sector has experienced significant pressure in the first half of the year. On the external front, just a few months after Donald Trump won the U.S. presidential election by promising for ‘’bring an end to all wars in the world," we began the year by leaving behind one of the biggest fears of the modern world: The current state of affairs between Iran and Israel is a source of concern. However, the US tariff threats persist, albeit with temporary reprieve from the agreement with China and country-by-country extensions and exemptions.

As we enter the second half of the year, we present our current assessments and expectations in our 2H25 Outlook Report

Our BIST 100 index target, points to a level of 13,600 in the 12-month term and a 36% return potential on an index basis. This potential exceeds the 24% annualized CPI rate projected for the upcoming one-year period and closely aligns with the rates derived from our simulations of average net deposit returns over this timeframe. Conversely, the average potential return for companies with above-index returns is notably higher, reaching approximately 46%.

We are removing Yapı Kredi Bank from our revised and redesigned Model Portfolio and replacing it by Garanti Bank. Additionally, we are removing Aselsan from our portfolio, as it has yielded a 65% index relative return since its inclusion in our Model Portfolio in February. Turkish Airlines, Coca Cola İçecek, Ford Otomotiv, Mavi Giyim, Migros, Teknosa, TAV Airports, Turkcell and Tüpraş remain in our Model Portfolio. It is important to note that we meticulously monitor the performance of the companies in our Model Portfolio.