As Turkey's stock index falls, Gulen-linked stocks win out

Katmerciler Arac Ustu Ekipman Sanayi ve Ticaret

08/06/2015 15:03

ISTANBUL, June 8 (Reuters) - Turkish companies with 
connections to followers of the Islamic cleric Fethullah Gulen, 
an ally turned foe of President Tayyip Erdogan, rallied on 
Monday after Erdogan's ruling AK Party failed to achieve a 
majority in Sunday's parliamentary election. 
    Mining company Koza Madencilik  IPEKE.IS  was up more than 
13 percent, gold miner Koza Altin more than 12 percent 
 KOZAL.IS  and energy company Ipek Dogal  IPEKE.IS  more than 10 
percent by 1225 GMT. 
    Islamic lender Bank Asya  ASYAB.IS , which was taken over by 
regulators last month and trades on a watch list, rose 10.8 
percent, the maximum it can gain in a trading session. 
    The companies are regarded as linked to followers of Gulen, 
who has lived in self-imposed exile in the United States since 
1999. Erdogan accuses him of trying to establish a "parallel 
state" in Turkey; Gulen in turn says Erdogan is leading Turkey 
"toward totalitarianism".  ID:nL6N0VD33G  
    "These stocks were under stress because of the conflict 
between their owners and the government. So the pressure will 
dissolve a little bit," said Ferhat Yukselturk, strategic 
planning manager at Odeabank. 
    The main Istanbul stock index  .XU100 , by contrast, fell 
5.75 percent, as the possibility of a minority or coalition 
government unnerved investors. 
    Another analyst, who did not want to be named, said the 
gains may be short-lived for the Gulen-linked shares.      
    "Despite being good companies, Koza Group shares are trading 
at a considerable discount. The election results had a positive 
impact on these shares. We could see short-term upward rallies 
from certain shares," he said. "But it will be difficult for 
these rallies to turn into medium-term upward trends." 
    Shares in companies seen as close to the government such as 
Tumosan  TMSN.IS , manufacturer of diesel engines and tractors, 
textile maker Ihlas Maden  IHMAD.IS  and Ihlas Gazetecilik 
 IHGZT.S , fell sharply. Katmerciler Ekipman  KATMR.IS , which 
manufactures water cannon vehicles, tumbled more than 19 
percent. 
    The company had benefited from winning public tenders to 
produce riot-control vehicles and is majority owned by former AK 
Party MP Ismail Katmerci.     
    "Investors seem to have given a knee-jerk reaction and sold 
these shares, but the volumes are very thin," a senior trader at 
a Turkish stock broker said.  
    Energy companies like Zorlu Enerji  ZOREN.IS , Akenerji 
 AKENR.IS  as well as textile producer Soktas  SKTAS.IS  were 
also down because of their forex exposure, he said.  
 
 (Reporting by Dasha Afanasieva, Ceyda Caglayan and Can Sezer; 
Editing by Larry King) 
 ((dasha.afanasieva@thomsonreuters.com; +90 212 350 7051;)) 
 
Keywords: MARKETS TURKEY/STOCKS GULEN