Gubretas Surges Most in 4 Years on Bonus Shares: Istanbul Mover

Gubre Fabrikalari TAS (GUBRF), a Turkish maker of fertilizers, rallied the most in more than four years as it plans to boost capital by distributing bonus shares.

Gubretas, as the company is known, soared 13 percent, the most since May 2009, to 16 liras at the close in Istanbul, bringing the three-day gain to 14 percent. More than 7.4 million shares changed hands, about 17 times the three-month daily average, according to data compiled by Bloomberg. The benchmark Borsa Istanbul National 100 (XU100) index slumped 1.8 percent, extending its weekly decline to 4.4 percent.

“Normally, a bonus issue should not have much effect on the share price,” Ilyas Safa Urganci, an analyst at Is Investment in Istanbul, said by phone today. “Investors are probably buying as they think liquidity of the stock will increase.”

Istanbul-based Gubretas said yesterday it plans to quadruple capital to 334 million liras ($174 million). The capital will be added from provisions as the company distributes three bonus shares per share to investors, it said. The stock has rallied 13 percent this year, compared with a decline of 7.2 percent for the benchmark index.

Gubretas posted a 42 percent drop in first-quarter net income to 33.8 million liras. Profit in the second quarter may surge to 15.5 million liras from 3.8 million liras a year earlier, according to the median estimate of four analysts on Bloomberg.

Gubretas trades at 6.8 times estimated 12-month earnings, data compiled by Bloomberg show. That compares with a multiple of 12.4 for Istanbul-based Bagfas Bandirma Gubre Fabrikalari AS (BAGFS), 12.5 for Jubail-based Saudi Arabian Fertilizer Co. (SAFCO) and 9.8 for Tel Aviv-based Israel Chemicals Ltd. (ICL)

Eight analysts recommend buying shares of Gubretas, while four say hold, data compiled by Bloomberg show.

To contact the reporter on this story: Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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