There have been remarkable developments in Borsa Istanbul recently.
While the wind is reversing in public offerings where millions of citizens queued up, some shares are experiencing suspicious movements that revolt small investors.
One of the most prominent developments is the collapse in Gübre Fabrikaları Türk A.Ş. (Gübretaş) shares in the last week.
The share value of Gübretaş, which has achieved a spectacular rise in Borsa Istanbul in the last four years and was included in the BIST 30 index, has declined by approximately 47 percent in the last 6 days.
The Gübretaş share, which closed December 15 at 360 TL, became the floor again this morning with a 9.9 percent drop and saw 191 TL.
The company’s market capitalization also fell sharply from 120 billion TL to 64 billion TL in a week.
The total losses of those holding the shares of the company, whose public float rate is 23.43 percent, totaled approximately 13 billion TL in the last 6 days.
The rise of Gübretaş, which normally produces fertilizers, was influenced by the gold mine with 109 tons of reserves announced to have been discovered in Söğüt district of Bilecik in 2020.
On October 1, 2020, the company was included in the BIST 30 index, which tracks the performance of 30 companies with the highest market capitalization and the highest trading volume in Borsa Istanbul.
WHY DID IT PLUMMET?
Gübretaş shares started to decline with the statement made by the company to the Public Disclosure Platform (KAP) on Monday, December 18.
In the said statement, it was announced that the company’s application for a bonus issue was rejected by the Capital Markets Board (CMB).
In the PDP statement dated June 5, 2023, the company announced that it applied to the CMB to increase its capital of 334 million TL by 300 percent to 1 billion 336 million TL.
In Gübretaş’s PDP disclosure dated December 18, it was stated that this request was rejected at the CMB’s meeting dated December 7, 2023 and that “the limited positive opinion in our company’s independent audit report was based on the lawsuit to which our subsidiary Razi Petrochemical Co. which is the basis of the limited positive opinion in the independent audit report of our company and to which our subsidiary Razi Petrochemical Co. is a party, and taking into account the risk of causing capital increase from non-existent sources and the precautionary principle of accounting, our company has been informed that “it has been decided to reject our application for capital increase through bonus issue at this stage”.
Gübretaş’s Iranian subsidiary Razi Petrochemical was sued for 330 million dollars in a local court for “excess gas consumption”.
WHAT DO EXPERTS SAY?
Info Investment Strategist Çağlar Toros stated that Gübretaş stock was pressured with the rejection of the bonus issue.
Toros said, “This pressure continued to increase and it seems that sales increased on the stock and VIOP side on the market side, both for hesitation and for collateral completion or loan closure.”
A brokerage house official pointed out that there have been stocks in Borsa Istanbul that have been inflated with high credit transactions in recent years and that the CMB may have taken action on this issue.
Mehmet Gerz, General Manager of Ata Portföy, said that the criteria for entry into BIST 30 should not only be market capitalization and trading volume, but also the corporate governance rating should be a criterion, otherwise unhealthy pricing emerges.