Erdemir Drops Most in 3 Weeks as Chairman Quits: Istanbul Mover

Eregli Demir ve Celik Fabrikalari TAS declined the most in more than three weeks after the chairman of Turkey’s biggest steelmaker resigned.

Shares of the company known as Erdemir fell 2.3 percent, the steepest drop since July 22, to 2.12 liras at the close in Istanbul. About 21.6 million shares traded, or 77 percent of the three-month average. The benchmark Borsa Istanbul National 100 index lost 2.1 percent in the first decrease this week.

Fatih Osman Tar stepped down as chairman of Zonguldak-based Erdemir and its two units, the company said yesterday. The resignation was a “professional decision” and didn’t reflect an “extraordinary situation,” Erdemir’s investor relations department said in an e-mail today.

“Such surprise developments create a negative perception among investors,” Umut Ozturk, an analyst at Burgan Securities in Istanbul, said by phone. “Investors might be pondering why he took such a decision. I see this as a temporary decline.”

The stock has dropped 2 percent this year, compared with a decline of 5.4 percent for the benchmark. Erdemir may report a 40 percent increase in second-quarter profit to 114 million liras ($59 million) tomorrow, according to the average estimate of 11 analysts on Bloomberg. Net income for the first three months of the year exceeded expectations in May.

The shares trade at 10 times estimated 12-month earnings, data compiled by Bloomberg show. That compares with 6.3 times for Turkey’s Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS, another steel producer, and 10.7 times for Egypt’s Ezz Steel, according to data compiled by Bloomberg.

Seven analysts recommend investors buy the shares of Erdemir, while 14, including Ozturk, recommend holding the stock and three say sell, the data show.

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