Economics & Strategy – Turkey Equity Strategy: Second

Istanbul-based Kazim Andaç and his Deutsche Bank group of six claim second place for a third year running. In July the analysts upgraded Türk Hava Yolları from neutral to buy, at 3.37 Turkish lire, making the case that the air carrier would see strong passenger traffic growth and higher revenue. Boy, were they right. The company reported in March that operating profit had increased by a whopping 192 percent year-over-year in 2012, to Tl1.05 billion ($561.3 million). By late May the shares had flown to Tl8.70 — for a stunning 158.2 percent advance that bested Turkey’s broad market by an impressive 120.6 percentage points. “It is still among our top picks,” Andaç reports. The team is also bullish on banks. “The fundamental picture remains solid for the sector, with further strengthening of the quality of earnings,” he notes. Investors are impressed. “Andaç foresaw Turkey looking East, not West, for growth,” says one. “Now that’s well understood, but he was early.” — Paul Sweeney