TSKB Gains as FinansInvest Says Buy on Weak Lira: Istanbul Mover

Turkiye Sinai Kalkinma Bankasi AS rose the most in two weeks after FinansInvest recommended investors buy the stock, citing benefits from a weakening lira.

The shares rose 4.4 percent, the most since June 7, to 1.68 liras at the close in Istanbul. About 4.24 million shares were traded, more than double the three-month daily average. The benchmark Borsa Istanbul National 100 index climbed 0.8 percent. FinansInvest restarted coverage of the bank known as TSKB with a 12-month price estimate of 2.75 liras, representing 71 percent upside from yesterday’s closing price.

The lira tumbled to a record low yesterday amid concern of reduced monetary stimulus in the U.S. and fallout from anti-government protests at home. Two-year benchmark bond yields climbed 31 basis points to 8.12 percent, the highest level since July 4.

“TSKB is the most defensive lender in this environment of rising rates and a depreciating lira,” Muge Dagistan, an analyst at FinansInvest in Istanbul, said in a phone interview. It is “positively impacted from the lira’s slump, as most of its loans are in foreign currencies.”

Debt in euros and dollars make up about 96 percent of TSKB’s loans, according to a quarterly presentation on the bank’s website. That “serves to inflate its net interest income as the currency depreciates” and the stock is a “good risk reward bet once the dust settles,” Dagistan said in an e-mailed note today.

Funding Agreements

TSKB has multilateral funding agreements with institutions including European Investment Bank and International Finance Corp. The lender reported a 4.3 percent increase in first-quarter profit to 84.7 million liras ($44 million). Net income in 2013 may advance 3 percent to 326.857 million liras, according to the mean estimate of 14 analysts compiled by Bloomberg.

The lira strengthened 0.5 percent today as emerging market assets recovered.

Ten analysts including Dagistan recommend investors buy TSKB shares, while five say hold, according to data compiled by Bloomberg.

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