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Turkey's GSD Boosts Shipping Exposure on Global Economy Recovery

  • GSD Holding plans to add tanker to fleet of dry bulk ships
  • GSD will wait for market calm before new investments, CEO says

Betting that a strong global economic recovery will benefit the shipping industry, Turkey’s GSD Holding plans to invest further in the acquisition of new vessels.

The company’s five dry bulk vessels are “fully employed,” with daily rental income reaching $11,000 per ship, Chief Executive Officer Akgun Turer said in an interview last week in Istanbul. A sixth is due to be delivered in May from Japan’s Imabari Shipyard.

Turer, 49, said GSD is looking into entering the tanker market. Tankers generally carry crude oil, petroleum products or petrochemicals, while dry bulk vessels carry items such as iron ore, coal, cement, finished steel, fertilizer and grains. Having both types “would provide a balance” in terms of operational profitability, Turer said.

GSD’s game plan is dependent on stronger economy worldwide, as the International Monetary Fund predicts global growth this year of 3.9 percent, up from an estimated 3.7 percent in 2017. In a Feb. 13 report, S&P Global Ratings said demand in key segments of global shipping, including dry bulk and tankers, would outstrip supply for the first time in several years in 2018.

In August 2015, GSD announced the sale of 76 percent of Turkish lender Tekstilbank for about $250 million to the Industrial & Commercial Bank of China. GSD still owns an investment bank and a factoring firm. Half of the proceeds from Tekstilbank was used in the acquisition of a 15 percent stake in energy company Silopi Elektrik.

GSD Holding shares rose 15 percent to 0.83 lira each this year in Istanbul, giving it a market value of about $100 million. The stock is covered by BNP Paribas analyst Ovunc Gursoy, who has a price target of 1.25 liras, an upside of 49 percent from Monday’s close.

“Today cash is precious and waiting makes more sense,” Turer, a former investment banker, said in response to a question about possible new investments. “The markets need a correction.”

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