Tupras Turkiye Petrol Rafinerileri AS (TUPRS) slumped to the lowest level in more than nine months after tax authorities started an investigation into Turkey’s sole oil refiner. Parent company Koc Holding AS (KCHOL) and its units also fell.
The shares of Kocaeli-based Tupras dropped 3.1 percent to 41.30 liras, their lowest since Oct. 15, at the close in Istanbul. Almost 1.6 million shares traded, 1.8 times the three-month daily average, according to data compiled by Bloomberg. The Borsa Istanbul National 100 (XU100) gauge slipped 0.2 percent to the lowest level since July 11 as Koc Holding, the biggest decliner by index points, lost 3.9 percent.
Turkey’s Finance Ministry started a probe into Tupras’ taxes, as well as an audit of its raw materials, products and lubricants’ inventory, the company said in a statement after markets closed yesterday. Koc Holding affiliate Aygaz AS, (AYGAZ) which sells liquefied petroleum gas, also said a tax probe was under way, triggering a 2.6 percent retreat in the stock.
“All group companies and the holding itself are falling, as nobody knows what will come out of this,” Hasan Sener, an analyst at Oyak Securities in Istanbul, said by phone. “ We may see pressure on the shares for some time.”
Aygaz retreated to 8.88 liras, the lowest since July 12, while Koc Holding, Turkey’s biggest group of companies, tumbled to 8.94 liras. Koc companies accounted for five of the top-10 decliners on the benchmark index.
Otokar Otomotiv ve Savunma Sanayi AS, which manufactures civilian and military vehicles and is 45 percent owned by Koc, according to data compiled by Bloomberg, slumped 1.5 percent. Ford Otomotiv Sanayi AS (FROTO), the carmaker co-owned by Koc and Ford Motor Co., retreated 2.1 percent.
Today’s declines took Koc’s loss to 16 percent since May 31, the start of anti-government demonstrations at Gezi Park in Istanbul that spread to other Turkish cities. That compares with a 14 percent decline in the benchmark index.
Finance Minister Mehmet Simsek said in a Twitter message late yesterday there was “absolutely no linkage between Gezi protests and current tax probes.” Prime Minister Recep Tayyip Erdogan told his party’s lawmakers on June 25 the Koc-owned Divan Hotel in central Istanbul will be investigated for “providing shelter” to protesters fleeing the police.
Other shares linked to Koc Holding also fell. Tofas Turk Otomobil Fabrikasi AS (TOASO), the car manufacturer Koc co-owns with Fiat SpA, dropped 4.6 percent, the most in more than a month.
Turkey’s central bank raised interest rates for the first time since October 2011 after the lira slumped to a record low of 1.9740 per dollar earlier this month. It increased its overnight lending rate by 75 basis points to 7.25 percent on July 23 and said “additional monetary tightening will be implemented when necessary.”
“Uncertainty in such situations is priced in an extreme manner, especially if other issues hover in the background,” such as rising interest rates, Serhan Gok, head of research at UBS Securities in Istanbul, said in e-mailed comments. “The market should stave off the worst of this in a few days and return to normalcy.”
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