| Another Turkish Broker Gets Snapped Up: Citigroup Acquires Opus Securities! |
| 13 September 2007 |
Reuters reported that Citigroup has now bought Opus Menkul Degerler, a brokerage house in Turkey, to grow its equities business.
Citi plans to change Opus Menkul Degerler (Securities)'s name to Citi Menkul Degerler A.S.
According to Opus Securities' website, "Opus Securities is regulated by Capital Markets Board of Turkey and holds equity brokerage, t-bill and repo trading, derivates brokerage, leverage equity transactions, investment consultacy and short selling licenses."
 As quoted in the Reuters article, "Turkey's equity market capitalisation has grown sevenfold in the last five years, and the depth of the market has increased commensurately. This acquisition provides a fast and efficient route to position ourselves in the market," said Steve Bideshi, Chairman of Citibank A.S.
Just another example of how Turkey as an emerging market and the Istanbul Stock Exchange (IMKB) has come of age. As posted here, this year alone, other broker acquisitions have occured such as Credit Suisse buying up Baran Securities, and Standard Bank acquiring Dundas Unlu Securities.
Additional Info: A list of registered brokers on the (antiquated) IMKB site.
 Technorati Tags: Credit Suisse, Baran Securities, Brokerage Houses, Trading Licenses, Deal Flow, Turkey, IMKB, Citigroup, Opus Securities, AcquisitionsLabels: acquisitions, Banking, Baran Securities, Brokerage Houses, Citigroup, Credit Suisse, IMKB, Trading Licenses
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| IMKB's Latest IPO's: Sinpaş REIT and Albaraka Turk Bank |
| 02 July 2007 |
The summer has really been heating up concerning IPO's and the IMKB. For both international and domestic investors, the IPO window seems to be fairly open in Turkey. Despite the usual theorizing over accurate values of the offerings, the success of the flotations and the mechanisms behind it may very well prove that Turkey and its ready investment climate is ripe for the taking. Although there is some cause for concern about what this may mean for Turkey's SME's. But first, here's how the two broke down:
SINPAŞ REAL ESTATE INVESTMENT TRUST
 Probably one of the most active and exciting sectors in Turkey right now, the Turkish REITs deserve mention all to themselves. Sinpaş REIT, as of its IPO will be the largest REIT, and certainly not the last. Here's how it fell out:
- 49% of stock was on offer representing 67.12 million shares. The bookbuilding was completed on June 15th.
- Foreign Investors will take the lion's share 66% of these shares, leaving domestic investors the remaining 34%.
- Total Subscription was oversubscribed 2x on the international side, while on the domestic side it was 1.08x oversubscribed.
- Two investors bought more than 5% of the offering, namely, Autonomy Capital and ING Investments.
Sinpaş REIT fell 6 percent on its IPO day, while the index of REITs fell 0.6 percent. The deal was originally priced at 6.85 to 8.40 lira per share. However, the price was eventually opened at YTL 7,60, in the middle of that range, giving the deal a value of 510 million lira ($392 million) and making Sinpas the biggest REIT on the market. Considering the initial public offering price and the share dispersion after the initial public offering, the market value of Sinpaş REIT has now reached to YTL 1.41 billion (approximately $795 million). The company is planning to channel the cash proceeds raised from the IPO into new residential projects. Speculators interviewed by Reuters (Yahoo Finance) were quoted as saying "Sinpas was valued at a 20 percent premium to its net asset value at its IPO price, making it more expensive than the sector, which trades at a discount of 10 percent, on a weighted average." Ayse Colak, deputy general manager of Tera Securities said, "It didn't come out very cheap," , adding the company was a medium-term bet as it has two large projects which are planned but not yet contributing to its value.
ALBARAKA TURK BANK
 Albaraka Turk, a subsidiary of Bahrain-based Albaraka Banking Group, was founded in 1985 as the first bank to operate on non-interest base. Albaraka Türk has 66 branches in Turkey. The bank's reported total assets in the first quarter are YTL 2.6 billion, while its net profit stands at YTL 18.3 million.
- 22.22% of stock was on offer representing 54.5 million shares. The bookbuilding was completed on June 25th. The bank had its IPO on June 29th.
- Foreign Investors will take 63% of these shares, leaving domestic investors the remaining 37%.
- Total Subscription was oversubscribed 21.3x on the international side, while on the domestic side it was 60.4x oversubscribed!!!. This makes total demand for the IPO 32x oversubscribed and at a value of US $5.4 billion.
- Originally, the price range of the shares, the nominal value of which is YTL 1, was estimated to be between YTL 3.60 and YTL 4.10. Although, now it has priced its initial public offering at 4.1 lira a share, at the top of an initial range, valuing the bank at around $840 million
- The bank is expecting a total gain between $150 million and $170 million from the IPO.
Shares of Albaraka shot up 10% on opening day, closing at YTL 4.52. The Islamic banking sector is particularly in focus as the owners of larger Islamic lender Turkiye Finans are in talks to sell half the bank, most likely to an institution in the Gulf, which is an Islamic banking hub. The four banks making up the sector saw total assets grow 38 percent last year and net profit rise 56 percent, according to data from the Participation (non-interest) Banks Association. Shares in rival Bank Asya have more than doubled since its offering last year, far outperforming the wider banking sector.
A FINAL WORD
Previously I pondered what this means for Turkey's SME's. Some might say nothing at all - these deals are much too big. Others might simply be happy that the IPO machine is in full gear and being tuned up for more to come. For private equity enthusiasts, this is promising, but for smaller VC's, we still might have to wait awhile. But the domestic demand alone for Albaraka is not something to laugh at, and I'm sure the various legal professionals, underwriters, as well as brokerage houses and investment banks should stand up and take notice. Entrepreneurs also should learn something from this little lesson. Could the IPO window at the IMKB finally be coming of age, able to weather any political and economic storms? Let's wait for the elections first.
Technorati Tags: IMKB, IPO, REIT, Sinpaş, Deal Flow, Turkey, flotation, Albaraka Turk, Banking Sector, Islamic Banking
Labels: Banking, Banking Sector, Flotations, IMKB, IPO, Islamic Banking, REIT
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| Banking Sector Acquisitions in Turkey |
| 25 June 2007 |
The purhase of Oyak Bank by the Dutch ING Group has again brought to the fore the palpability of Turkey's banking sector and opportunity that exists. The total value of the sale will be $2.67 billion for 100% of Oyak Bank, which was previously owned by the Turkish Armed Forces Pension Fund.
Although, these are not private equity deals per se, I would just like to highlight that the potential still exists for equity investors from abroad proven by the extent of the current acquisition dealflow in the banking sector.
Thankfully, TDN published a nice chart of these acquistions that I will reproduce here and keep updated. Since 2001, there have been 17 deals done involving 15 banks selling equity partitions totaling $16.98 billion. Here are the deals:
Latest Banking Acquisitions in Turkey
(Originally Sourced from TDN) |
| Bank |
Date |
Acquirer |
Acquired % |
Amount Paid (USD) |
| Demirbank |
Sept. 2001 |
HSBC |
100% |
$350 mln |
| Koç Fin. Serv. |
Oct. 2002 |
Unicredito |
50% |
$240 mln |
| TEB Fin. Serv. |
Nov. 2004 |
BNP Paribas |
50% |
$217 mln |
| Yapi Kredi Bank |
Jan. 2005 |
Koçbank |
57.4% |
$1,390 mln |
| Şekerbank |
July 2005 |
Rabobank |
36.5% |
$90 mln |
| Dişbank |
Aug. 2005 |
Fortis |
89.3% |
$1,056 mln |
| Garantibank |
Aug. 2005 |
GECF |
25.5% |
$1,560 mln |
| C Bank |
Dec. 2005 |
Bank Hapoalim |
57.5% |
$113 mln |
| MNG Bank |
Jan. 2006 |
Dubai Islamic Bank |
100% |
$160 mln |
| Finansbank |
Mar. 2006 |
NBG |
46% |
$2,780 mln |
| Tekfenbank |
May 2006 |
EFG Eurobank |
70% |
$185 mln |
| Denizbank |
May 2006 |
Dexia |
75% |
$2,440 mln |
| Şekerbank |
June 2006 |
Turan Alem |
34% |
$260 mln |
| Akbank |
Oct. 2006 |
Citigroup |
20% |
$3,100 mln |
| Alternatifbank |
Nov. 2006 |
Alpha Bank |
50% |
$205 mln |
| MNG Bank |
Apr. 2007 |
Arab Bank/ Bank Med |
91% (50%/41%) |
$160 mln |
| Oyak Bank |
June 2007 |
ING Group |
100% |
$2,760 mln |
UPDATED 27-07-07:
|
| Turkiye Finans |
July 2007 |
Saudi National Commercial Bank |
60% |
$1,080 mln |
| Turkish Bank |
July 2007 |
National Bank of Kuwait |
40% |
$160 mln |
Technorati Tags: Banking Sector, Acquisitions, Mergers, Banks, Deal Flow, TurkeyLabels: acquisitions, Banking, Mergers
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| Investment Banks clamor toward Turkey; Scoop up Brokerages and Licenses |
| 15 March 2007 |
Turkey – the emerging market. Could it be that the political and fiscal doldrums of Turkey are in its past? Well, the statistics of Turkey’s evolution and its developing status tell an amazing story. Able to withstand the hiccup of the global markets and hot-money pull-out of last year, the Turkish market has been outperforming almost all of the world’s markets (at least up until the end of February). Faced with this “sense of stability”, major brokerage and investment houses have decided to set up shop in Turkey in attempts to reap the remaining benefits of this growing market. With a new deal being announced literally every month for the last six, could we actually call it a boom? Nevertheless, will the ghosts of Turkey’s past come back to haunt (hence, the implications of the most recent global downturn), or have these banks and investors really taken a leap of faith toward a hopeful and developed nation?
A list of entries and office openings (though not complete) is as follows:
 July 10, 2006
- French-British investment bank Rothschild said it will open a bureau in Turkey to take advantage of the fast-growing Turkish economy.
August 22, 2006
- Barclays Capital has become the latest investment bank to appoint a dedicated head for its Turkish business as investment banks crowd into one of the world's fastest-growing markets.
The UK investment bank, which has been recruiting aggressively under chief executive Bob Diamond, has hired Murat Talayhan from Standard Bank to a new role as head of investment banking in Turkey.
November 07, 2006
- Morgan Stanley announced its intention to open an office in Istanbul, Turkey. The Firm has received the appropriate approvals from the Capital Markets Board (CMB) of Turkey and plans to open an office in early 2007. Morgan Stanley has been active with clients in Turkey since 1990 and intends to offer a comprehensive range of business lines through its newly established presence, including investment banking, capital markets, sales and trading, real estate and commodities. In order to facilitate the establishment of an office, Morgan Stanley has acquired Arigil Menkul Degerler, a Turkish brokerage company, including its regulatory licences.
"As clients in Turkey demand sophisticated investment solutions across the range of asset classes, having local expertise and resources will be of significant benefit", said Gulnaz Aricanli, Head of Morgan Stanley in Turkey. "Turkey is a rapidly growing and strategically important market for the Firm and so to be involved in building and leading Morgan Stanley's business in Turkey is a great opportunity, and one with which I am excited to be associated."
December 27, 2006
- Credit Suisse could be the sixth international banking group to head for Turkey this year, after targeting a domestic broker that will give it access to the lucrative emerging market.
The Swiss-based banking group has been linked with Turkish brokerage Baran Securities, although it is understood that reports in the local press claiming the deal has already been signed is "jumping the gun". (Sourced: Aksam Gazetesi)
January 09, 2007
- Citigroup is to obtain a Turkish broking licence by acquiring a stockbroker in the country and hiring 12 staff for its Istanbul-based research and equities team. It is the latest expansion in Turkey by a foreign bank.
The move comes less than five months after Citigroup bought a 20% stake in Akbank, Turkey’s third largest bank, for $3.1bn (€2.5bn).
February 8, 2007
- Merrill Lynch said that it had opened an office in Istanbul and that it had expanded its investment banking team focused on the country. The bank will provide investment banking, corporate finance, risk management, advisory, research, securities origination, brokerage, dealer and related services in Turkey. Merrill Lynch announced three new Istanbul-based hires reporting to Kubilay Cinemre, head of global markets and investment banking at Merrill Lynch.
In December 2006, Merrill Lynch acquired a small private lender in Turkey, Tat Yatirim Bankasi, and its brokerage unit Tat Menkul Kiymetler AS. Tat Bank will take the brand name of Merrill Lynch in Turkey; and Tat Securities will become Merrill Lynch Menkul Degerler or Merrill Lynch Securities, it said at the time.
March 1, 2007
March 1, 2007
As always, I welcome any comments or additions to this list. It will be interesting to see who will be next. Any rumours availible can be discussed here. It definitely is not a bad time to have a licensed boutique investment house in Turkey. Now might not be a bad time to add those little atmospheric touches to the office to raise the value of the firm.
UPDATE: May 10th, 2007
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Credit Suisse finally made a play for Turkish brokerage house Baran Securities (Baran Menkul). According to Reuters, "Credit Suisse, which already had an office in Istanbul, said it now held a broker-dealer licence on the Istanbul Stock Exchange (IMKB) and would offer expanded equity sales, trading and research in Turkey." On May 5, Credit Suisse began trading under the name of Credit Suisse Istanbul Menkul Değerler A.S. Exact numbers were not disclosed.
Source: Credit Suisse Press Release - May 10th, 2007
Alternate Source: IMKB Listings of Members - Brokerage Houses
Technorati Tags: Investment Banks, Brokerage Houses, Emerging Market, Global Markets, Deal Flow, Turkey, economy, Rothschilds, Barclays Capital, Murat Talayhan, Morgan Stanley, Gulnaz Aricanli, Credit Suisse, Citigroup, Akbank, Merrill Lynch, Kubilay Cinemre, Carlyle Group, Can Deldag, Standard Bank, Baran Securities, Standard Bank, Dundas UnluLabels: Banking, Brokerage Houses, IMKB, Trading Licenses
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Publisher: Jon H. Black
