These Are the European Stocks Getting Hit on Turkey Fears

(Bloomberg) -- European stocks are having another bad day as concerns about the ongoing economic crisis in Turkey reverberate across different sectors of the market.

Bank shares stand out as the biggest victim of Turkey fears, with today’s 1 percent drop for the Stoxx 600 Banks Index adding to a 1.9 percent drop on Friday. Still, the impact in reality is much wider: from tourism to construction and telecom companies, almost no European sector has managed to avoid the selloff.

These are the groups and stocks that are most sensitive to Turkey risks, according to analysts. Share moves are as of about 3 p.m. in London trading:

Banks

  • BBVA (-3%), UniCredit (-2.6%), ING (-2%), BNP Paribas (-0.4%) and HSBC (-0.6%) are the most exposed European banks, according to Deutsche Bank analysts led by Flora Benhakoun
    • See earlier: These Are the Five European Banks in Focus on Lira: Street Wrap
  • BBVA is exposed via 50% ownership in Garanti; UCG via ~40% ownership in Yapi Kredi; ING and HSBC via their wholly owned subsidiaries; BNP via 72% stake in TEB
  • Deutsche Bank analysts don’t expect systemic implications from lira crisis and believe the impact should be broadly manageable for European banks, according to note
    • Depending on how the situation develops, there may be “significant” capital and earnings implications

Travel

  • TUI (-2.9%), EasyJet (+0.4%) and Thomas Cook (-2.6%) are among most sensitive in the sector; an economic collapse in Turkey would be “far more damaging and more than offset any temporary boon from the weaker lira,” according to Neil Wilson, chief market analyst at Markets.com
  • Do & Co., Austrian airline caterer, falls as much as 12% in Vienna before paring drop to 1.8%
    • NOTE: Company generated 33% of its 2016/2017 revenue in Turkey, according to its annual report, mostly through catering deal with Turkish airline

Transport

  • DFDS (-6.4%) as the market questions the timing of its $1.2b acquisition of U.N. Ro-Ro, Turkey’s largest operator of freight ferry routes connecting Europe and Turkey; the deal closed in June
  • French airports operator Aeroports de Paris (-1.2%) owns ~46% of Turkish airport operator TAV Havalimanlari

Retail

  • The crash in the lira could boost Inditex (-0.6%) by lowering its costs for making clothes in Turkey, a key manufacturing base, though the economic crisis there threatens to hit customer demand
    • Inditex manufactures about 15% of its goods in Turkey, one of its four key production hubs along with Spain, Portugal and Morocco, according to SocGen analyst Anne Critchlow
  • Berenberg says that a combination of lira depreciation, dollar strengthening and cotton price inflation means that the net winner is Asos (-0.9%), while AB Foods (-0.2%), Debenhams (+6.8%) and Next (-1.5%) are net losers
    • Biggest beneficiaries of a weak lira in terms of sourcing markets as a percent cost of goods sold would be Asos and Superdry (-2%), followed by AB Foods’ Primark, H&M (-1.5%), Inditex and Marks & Spencer (-1.5%)

Insurers

  • AXA (-0.5%), Allianz (+0.8%), Zurich Insurance (+0.2%) and Mapfre (-1.1%) all have local arms in Turkey

Telecoms

  • Swedish telecoms group Telia (-0.6%) owns 24% indirect holding in Turkish mobile operator Turkcell; Vodafone (-0.5%) also has operations in Turkey

Construction

  • Aside from UniCredit, the most exposed Italian companies are industrials, according to Mediobanca
    • Astaldi (-4.9%) has two Turkish concessions that are to be sold, according to co.’s most recent business plan; disposal of Bosphorus Bridge concession is main condition to set up underwriting consortium for announced capital increase
    • Cementir (-1.1%): Turkey represents ~8% of estimated 2018 group Ebitda for Cementir

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