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2.4 More Borsa Istanbul anomalies
Sasa Polyester (SASA), a Turkish textile materials producer, has been providing company shares to convertible bond holders.
Since March, a total of €97mn of papers have been converted into 54mn company shares, equivalent to a 0.7% stake in the company (see full list of transactions and share prices in the table below).
By August, Sasa was providing shares that it bought back under a share buyback programme to meet conversion demands. In September, Sasa’s stake reached zero and the missing shares were provided by Merinos Hali and Dinarsu Imalat.
As of October 12, Erdemoglu Holding had 1.41bn Sasa shares, representing a 63% stake, and Merinos Hali had 305mn, or a 14% stake. As of October 6, Dinarsu had 174mn shares, or an 8% stake.
Merinos and Dinarsu are Erdemoglu units. A 21% stake in Sasa is listed on Borsa Istanbul. However, Erdemoglu Holding, Merinos and Dinarsu are very active on Sasa’s trading board. As a result, only 15% of the company is currently held by market investors.
Foreign investors hold only 8% within the listed 21% stake. Sasa has many intensive individual investors (in Turkish they are called the “kucuk yatirimci”, or “KY”, meaning “small investors”).
In June 2021, Sasa sold €200mn of the 5-year convertible eurobonds (XS2357838601) in question at a coupon rate of 3.25%.
As of October 31, Sasa’s share price was up 604% y/y to TRY 120 while its eurobond price was up 249% y/y to €345. As a result, Sasa currently has the largest market cap, at $14bn, on Borsa Istanbul.
Thanks to the interesting performance of Sasa shares, the owners of Erdemoglu Holding, namely brothers Ibrahim Erdemoglu and Ali Erdemoglu, are currently among Turkey’s richest billionaires, according to Forbes.
Sasa has been conducting investments. However, these investments unfortunately fall short of explaining the extraordinary share price rise.
On October 14, Borsa Istanbul introduced a one-month short selling and transaction on credit ban on Sasa shares starting from October 17.
Market anomalies are not rare in Turkey. Sasa is among the leading candidates for the next dramatic tumble on the Borsa Istanbul.
In September, Borsa Istanbul-listed banking stocks were at the centre of the biggest “bull trap” (keriz silkeleme in Turkish) operation in the history of the market.
On September 22, bne IntelliNews noted: “Ahlatci Yatirim, a brokerage owned by an Erdogan-supporting businessman, Ahmet Ahlatci, was identified as carrying the biggest short position. The brokerage owner responded that Mehmet Akdere, a customer and well-known market 'masseur', was carrying the position, not the brokerage. He also said that Akdere was carrying out transactions via 10 more brokerages, not just through Ahlatci. You’d be hard-pushed, of course, to find observers who buy the story that the whole scheme was carried out by a single player.”
17 TURKEY Country Report December 2022 www.intellinews.com