Buy - Sell

·         TOLL ROADS PRIVATISATION: The final round of bidding will take place today for the TOR (transfer of operating rights) privatisation of the 2 bridges over Bosphorus in Istanbul & all major toll roads in TR. 3 consortia had submitted binding bids @ end of Oct: i) Nurol Holding – MV Holding – Alsim Alarko – Kalyon Insaat – Fernas Insaat, ii) KCHOL – UEM Group Berhad – Gozde Girisim, & iii)  Autostrade Italia - Dogus Holding – Makyol Insaat – AKFEN => winner will operate for 25 yrs. Toll revenues from roads & bridges privatized estimated @ TL890m in 2011 vs. operating & maintenance cost of c.TL270m.

 

·         AVIATION SECTOR: Reportedly, Pegasus will hold a press conference today to announce an order for >100 narrow-body (A320neos) aircraft from Airbus. Currently has 42 aircraft (all B737s) & there are c.370 jet aircraft registered by airlines in TR providing commercial air travel services. Airbus reportedly plans to start delivering A320neos in 2016. Comment: The significance of this order for Pegasus & TR aviation sector depends to a large extent over how many yrs it would be spread. In any case, might be perceived somewhat -ve for THYAO (BUY, TP: TL 6.14) on incr’d competition concerns for L/T. Finalisation of this order might also depend on successful completion of its potential IPO in early 2013.

 

·         TKFEN (BUY, TP TL8.45) => 1) CMB approved the sale of EFG Sec to Kuwaiti Burgan Bank on Friday, a critical milestone for the closure of Eurobank Tekfen’s sale to Burgan Bank, which increases the probability that the deal will close in 2012 and affects the size of Tekfen’s 2013 dividend payment. We forecast TL0.33 DPS for 2013 (4.7% yield). Upside/Downside to our est depends on the close of transaction in 2012. Recall TKFEN agreed to sell its 29% stake for $189m. The market was assigning low probability for a CMB meeting last week following the new CMB law. Separately, Tkfen announced that the Capex budget for the vertical integration project of Toros Tarim (fully owned subs) has increased from $232 to $300m => driven by change in the scope of the enhancement project for the existing phosphoric acid unit where further efficiencies can be delivered. Need further details to comment further.

 

·         ISCTR (HOLD; TP TL6.12) > Some shareholders of an Ottoman Bank which was merged with ISCTR in 1927 are suing the bank and requesting their shares and historical dividends, according to local dailies. Shareholders with unregistered shares as at 2012 year-end will lose all their rights and those shares will be transferred back to the companies. Will get feedback from mgmt.