Kardemir Jumps to Record as Railways Liberalized: Istanbul Mover

Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS rose to a record after Turkey approved a law to liberalize the railway industry, spurring bets of higher sales.

Shares of the Turkish steelmaker, which started making railroad tracks in 2007, jumped 3.7 percent to 1.98 liras at the close in Istanbul, the highest level since the company started trading in June 1998. The stock has gained 57 percent this year, compared with an 8.6 percent advance in the benchmark Borsa Istanbul National 100 Index.

Turkey’s parliament passed a law to 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 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.