Buy - Sell

·         GOLD-FOR-GAS => Fresh sanctions against Iran are reportedly back on the agenda following reports of the gold-for-gas trade. For the record, Turkey’s exemption related to oil imports from Iran is due to be reviewed on Dec 8. Tupras imports c25% of its crude from Iran down from 45% last year. There are no sanctions on its gas imports, which made up c20% the total as of last year.

 

·         NATURAL GAS/ELECTRICITY => Botas increased the price of NG sold to state-contracted power plants by 37% to TL1400-1427/000CM (almost 2x price of NG sold to the private sector). Botas is essentially shifting loses to its electricity production entity (EUAS) and TETAS. Comment => Gov’t has to eventually increase NG and electricity prices to eliminate losses on gov’t entities. We do not expect major relief for private generation companies (AKSEN,AKENR and ZOREN), as we do not see a significant increase in electricity tariffs in 2013 (elections 2014). However, this would provide relief to the spot market, where electricity prices have remained under pressure in last three months due to decline in the consumption on slowing economic activity.  Enka’s energy segment would be immune to changes in natural gas prices thanks to its cost plus agreements. Cement: Electricity makes c35% of cement players’ COGS. However, they have bilateral agreements and purchase less on the spot market. The news therefore should not have a material impact, as long as the electricity tarrıff remains unchanged.

  

·         BIMAS (BUY, TP TL83.83) => Abdulrahman El Khereiji has registered-for-sale 759K BIMAS shares (0.5% stake, 3.8x of average daily volume). El Khereiji had a 5% stake in BIMAS as of end-Sep. He has been selling his shares over the past few years.

 

·         UYUM (HOLD, TP TL3.45) => UYUM and Tesco Kipa (KIPA, N/R) denied yesterday’s Haberturk report which claimed that the two could not agree on the majority stake sale in UYUM. Haberturk had also claimed that UYUM is in talks with Makro Market, which was neither denied nor confirmed by the company. 

 

·         KRDMD (BUY, TP TL1.55) => KRDMD GM reportedly denied allegations of favoritism in response to complaints that some customers received deliveries before others in an ad on Nov. 26 ran by a steel re-rollers trade organization. KRDMD’s GM says it cannot meet orders from the said customers because they sometimes try place orders at the last minute when steel prices are on the rise. Says these customers had made similar allegations to the CMB and the CA in the past, yet KRDMD’s mgmt had always been cleared. Comment: KRDMD’s response is generally in line with our general understanding of the situation. We think the response might alleviate concerns raised by the ad and help the stock price recover (-7% week-to-date, underperforming the overall market by 5.7%)

 

·         EKGYO (NR) => Emlak REIT finished its tender for Istanbul Finance center project. Agaoglu Construction won the tender for TL1.46bn. Emlak’s share will be 4.6% of revenues or min of TL61m. Agaoglu will build a conference hall, 5 star hotels, office spaces and residences. Project also includes all of the infrastructure, parking lots, subway entrances, transportation roads in the Istanbul Finance Center.