Kardemir Soars to Record as Railways Liberalized: Istanbul Mover
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS (KRDMD) surged to the highest level on record after Turkey approved a law to liberalize the railway industry, spurring bets of higher sales.
Shares of the Turkish company that started making railroad tracks in 2007 soared 4.2 percent to 1.99 liras at 4:13 p.m. in Istanbul, the highest intraday level since the company listed in June 1998. That brings a rally this year to 58 percent, compared with an 8.7 percent advance in the benchmark Borsa Istanbul National 100 Index. (XU100)
Turkey’s parliament passed a law that will allow public and private companies to build and operate their own railways, state-run Anatolia news agency reported late yesterday. Rail sales comprised 8.6 percent of Kardemir’s total revenue last year, its 2012 financial statement shows. Kardemir is the only company in Turkey that can produce rails as long as 72 meters, according to its website.
“With the private sector stepping in, rail demand will rise,” Umut Ozturk, an analyst at Burgan Securities in Istanbul, said by phone today.
The ruling, subject to approval from President Abdullah Gul, also proposes the restructuring of Turkish State Railways, the state company known as TCDD, as an infrastructure operator. A separate company will be set up for railway operations, Anatolia reported.
Kardemir’s first-quarter profit will probably drop 45 percent to 41 million liras ($22.8 million), according to the median estimate of three analysts compiled by Bloomberg. Six analysts recommend investors buy the shares, while four say hold and two recommend selling.
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