Akçansa Market perform

Suspension of construction activity following 1999 earthquakes
depressed the Turkish cement industry as no building permits were issued
between 10 April and 10 July 2000.
Due to the crisis in cement sector, Akcansa posted dismal results in
1H 2000. Net sales fell 30% to USD 87 million, while net profit plummeted
89% to USD 2.6 million, yoy.
Production in Marmara region is down 20% yoy in 1H 2000. Akcansa
operates in Marmara region, which is the most damaged region by the ban on
building permits. Nevertheless, by the establishment of construction
inspection firms, we expect construction activity to revive in Turkey,
especially in Marmara region in 2001.
Akcansa will benefit strongly from the recovery in the sector thanks
to its competitive position in Marmara region. While share price may
continue to be depressed ahead of poor 2000 results, our long run target
market value is USD 650 million, offering a 50% upside.
We assign Akcansa a MARKETPERFORM rating considering strong growth
prospects as interest rates fall and mortgage lending picks up. We believe
Akcansa will harvest the benefits in 2001.