Istanbul: In Turkey, the government’s forced takeover of a company can spur a rally.
A court in Ankara handed over 18 corporations owned by Akin Ipek to the Savings Deposit Insurance Fund this month because of his ties to an expatriate Muslim cleric the government blames for a failed coup in July. Three of those companies, Koza Altin, Ipek Dogal and Koza Anadolu Metal, are publicly traded, and all are among the five top performing stocks on Turkey’s benchmark Borsa Istanbul 100 Index in September, with the latter headed for its best month in a decade.
The takeover marked the end to about three years of bad blood between Ipek’s companies and Turkish authorities. During that period, some of them had mining licenses revoked, experienced police raids and were the subject of investigations. It began after Ipek was accused of directing cash to the movement influenced by US-based cleric Fethullah Gulen, a man embroiled in a fierce rivalry with President Recep Tayyip Erdogan. Ipek has denied the charges. Erdogan blames Gulen for masterminding the attempted coup, which Gulen has also denied.
“Koza shares are rising on optimism that with the transfer of shares to SDIF, the companies will be able to get licences again and restart production,” Ilyas Safa Urganci, an analyst at Is Investment in Istanbul, said by email. Once the transfer is completed, “the companies will either be privatised again or will be transferred to the Treasury, both of which are seen as better options compared to the years-long dispute that weighed on the stock prices.”
Pressure ends
Koza Anadolu Metal Madencilik Isletmeleri AS jumped 62 per cent since August, poised for its best month since September 2006. Gold miner Koza Altin Isletmeleri AS and energy company Ipek Dogal Enerji Kaynaklari Arastirma Ve Uretim AS surged 25 per cent and 54 per cent, respectively, while the Borsa 100 climbed 1.5 per cent in September.
While the rally points to hopes that an era of political pressure on the companies will end, it also reflects the unpredictable post-putsch environment investors have to navigate. The last company to be seized by the government for alleged ties to Gulen, Asya Katilim Bankasi AS, an Islamic lender also known as Bank Asya, was effectively wiped out, along with its minority shareholders.
Under management by government appointees, none of the three listed companies owned by Ipek has reported financial results for the last three quarters, leaving investors to guess at their financial health.
“Some investors are betting that these companies will more likely be sold and that they’ll go back to their old days,” said Alper Akalin, an Istanbul-based analyst at Deniz Yatirim Menkul Degerler, who has had one of the companies, Koza Altin, under review for a year. “But how can one make sure given the level of uncertainty and lack of transparency?”
