Soaring Turkish Cement Makers Not Stopping After Trump Tweets
Soaring Turkish Cement Makers Not Stopping After Trump Tweets
(Bloomberg) -- While Donald Trump’s latest tweets on Turkey’s planned incursion into Syria have dragged the country’s benchmark equities gauge and other lira assets lower, they are having the opposite effect on its cement makers.
Mardin Cimento shares have surged 35% in the past two trading sessions, while rival Unye Cimento has gained almost 10%. According to Toygun Onaran, head of equity research at Istanbul-based Oyak Securities, the stocks are being fueled by optimism that demand will be boosted by housing and infrastructure projects needed for refugees in northern Syria.
Since a plan to build villages and towns for Syrian refugees at an estimated cost of about $26 billion resurfaced in late September, shares of all 15 cement-makers trading on the Borsa Istanbul All Shares Index have outperformed the index, which is down 3.5%. Mardin Cimento has led the rally with gains of 41% in the period, reflecting its location near the Syrian border in southeast Turkey.
The housing project envisaged by the Turkish authorities is “a possible bonanza” for construction firms close to the ruling AK Party, Wolfango Piccoli, co-president at Teneo Intelligence, wrote in a note Monday.
After a White House statement late Sunday that the U.S. wouldn’t stand in the way of a Turkish incursion into northern Syria, Trump appeared to backpedal on Monday, warning Ankara in a tweet that he would “totally destroy and obliterate” the nation’s economy if it takes unspecified “off limits” actions. The benchmark Borsa Istanbul 100 Index dropped 1.5% on Tuesday, extending Monday’s retreat, though Mardin Cimento’s gains continued unabated.
The stock was trading 12% higher as of 12:25pm in Istanbul, extending Monday’s 20% advance. Unye Cimento rose 5%.
“Although Mr. Trump’s tweets have complicated the situation, it didn’t include any clear message objecting to Turkey’s military incursion. So the only official statement is still that U.S. neither supports nor objects to the operation. Thus, the market is still betting on a Syria operation, the creation of a buffer zone and the launch of a rebuilding period,” Onaran said.
To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net
To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Paul Jarvis
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