ECONOMY

Turkey’s TAV jumps 10 pct at bourse debut

ISTANBUL (Reuters) – Shares in Turkish airport operator TAV jumped 10 percent at their debut yesterday, with demand mainly from abroad after a heavily oversubscribed offering. TAV is the only listed airport operator in the region and manages airports in fast-growing EU candidate Turkey’s three largest cities of Istanbul, Ankara and Izmir. Travel is growing fast in Turkey, where flag-carrier THY saw a 19 percent rise in passenger numbers in 2006. Shares in TAV shot straight to an 11 lira ceiling set for the first session, 10 percent above the initial public offering price, which had been set toward the top of an 8.55 to 10.3 lira a share range. Some profit-taking sent the stock down to a low of 10.70 lira, but it retraced to end the day at 11 lira, although analysts said it was not priced cheaply. A ceiling of 12 lira was set for the second session. «The company is the only terminal management company in the region and there was a lot of attention on the company before the IPO,» Raymond James analyst Kerem Tezcan said. He said TAV, which is also looking at expansion abroad, had an enterprise value/EBITDA multiple of 11.3 based on 2007 estimates, above the 9.8 average of international peers he looks at which include Germany’s Fraport. «This company is a growth story,» he said. The tranche aimed at foreign institutions in the offer – the largest chunk – was 18 times oversubscribed and overall demand amounted to $5 billion, 15 times the amount sold. Brokers said demand for shares was coming from abroad on Friday, while locals were taking profits. Foreigners hold about 70 percent of Turkey’s free-float. More to follow Trading volumes yesterday reached 337 million lira, 25 percent of total market trading, according to Reuters data. TAV’s 18.4 percent IPO is the first major offering this year and is expected to be followed by other listings, including the sale of 25 percent of state-owned Halkbank and the brokerage arm of Turkey’s largest lender Is Bank. The Istanbul stock index is 12 percent higher than it ended last year, returning to levels of May 2006, when an exodus of foreign capital knocked Turkish assets sharply lower. Turkish stocks have far outperformed major emerging market rivals, although some investors are concerned that presidential elections in May and general elections in November could undermine the market, which tends to be sensitive to politics.