The share price of Turkish Airlines (THYAO) fell by 6% to Turkish lira (TRY) 13.44 by the market close on November 25 from the TRY14.22 seen at the end of November 18 in the wake of BlackRock saying in a November 19 stock exchange filing that it had increased its stake in the flag carrier to 5.12% from 4.485%. The expansion of its holding followed a November 14 purchase of 8.69mn shares at an average price of TRY13.57.

On November 18, Boeing announced that SunExpress, a joint venture between Turkish Airlines and Germany’s Lufthansa, had exercised options for 10 additional Boeing 737 MAX 8 aircraft, valued at $1.2bn according to list prices.

The SunExpress-Boeing deal came less than a week after Turkish President Recep Tayyip Erdogan’s visit to the US to deal with tensions between Turkey and its Nato ally.

Ilker Ayci, THY board chairman, recently said that the airline was still keeping 24 Boeing MAX jets grounded following the deadly crash of an Ethiopian Airlines jet in March.

The Turkey Wealth Fund (TWF), chaired by Erdogan, controls a 49.12% stake in Turkish Airlines. The Privatisation Administration retains one golden share while the remaining 50.88% of the carrier is listed on the Borsa Istanbul.

Shareholders that have a higher-than-5% stake in a Borsa Istanbul-listed company are obliged to inform the public disclosure platform (KAP) as regards their transactions in company shares, according to local regulations.

BlackRock’s Turkish Airlines stake has been moving above and below the 5% level for a while.

On July 26, New York-headquartered BlackRock, one of the world’s largest asset managers with $6.84 trillion in assets under management as of August, said it increased its stake in Turkish Airlines to 5.06% from 4.96%.

On August 23, the US-based investment giant said its stake in Turkish Airlines had declined to 4.96% from 5.24%.

BlackRock was among the investment funds that were present at a meeting held on November 15 in London between Istanbul mayor and Erdogan administration opponent Ekrem Imamoglu and finance industry representatives. Imamoglu has said he is having problems securing financing for the Istanbul municipality from government-owned banks.

On June 25, BlackRock said it had increased its stake in Turkish gold miner Koza Altin to 5.01% from 4.94%.

In February 2018, it was the top buyer in largest Turkish electricity distributor Enerjisa Enerji’s initial public offering (IPO).

BlackRock also has stakes in state-controlled Halkbank and real estate investment trust Emlak Konut REIT.

It is at the same time the biggest single holder of Turkish government bonds.

Foreign holdings rise

Foreigners’ holdings of Turkish Airlines’ free-float shares rose to 44.98% as of November 22 from 35.67% on October 22 but compared lower than the 65.23% recorded at end-2018, according to an Is Invest daily bulletin.

Foreign holdings figures may include Turks that trade via foreign brokerage houses. These accounts, whether in reality representing foreign or Turk investors, generally perform high volume transactions that impact headline share prices.

Reuters reported on October 18 that Turkish Airlines had mandated lenders for eurobonds or Enhanced Equipment Trust Certificates. However, nothing has been heard of the move since then.

In the first 10 months of 2019, THY saw a 1.6% y/y decline in total passenger traffic to 63mn with domestic passengers falling 7.5% y/y to 26mn.

In January-October, THY carried 37mn international passengers, translating to a 3.1% increase on an annual basis.

THY flew to 316 destinations as of end-October, up from 304 destinations a year ago. It has a fleet of 346 aircraft.

In January-September, Turkish Airlines’ net profit declined by 37% y/y to TRY2.59bn.

Shares in Turkish Airlines have been among the most active stocks on the Borsa Istanbul since a short-selling ban on leading banking shares, effective since October 16, was introduced, hitting transaction volumes in big Turkish bank stocks.

Despite concerns over the bourse’s free market status under government pressure, the Istanbul stock exchange’s benchmark BIST-100 index rose into the 107,000s on November 19 from the 93,000s on October 14 before falling back to the 105,000s.

The rise was led by Turk Telekom, Emlak Konut REIT, Erdemir, Enerjisa, TAV Airports and Turkish Airlines, while 27 of the BIST-30 components had gained on a month-on-month basis as of November 25.

However, 21 of the BIST-30 companies were down on a week-on-week basis, also as of November 25. Turkish Airlines led the losses, losing 5.49% w/w.

Currently, the 107,000s seem the peak of the stock exchange’s latest synthetic rally