İŞ INVESTMENT
İş Investment is the investment arm of İş Bank and the leading
investment banking institution in Turkey. İş Investment stands out as
the only listed brokerage house in the country offering variety of
services, such as;

Brokerage (Trading securities including domestic and international
equities, fixed income and derivatives)

Investment Advisory

Asset Management

Corporate Finance (Public offerings, M&As and strategic consultancy)

Research
Best Equity House in Turkey
.
İş Investment rewarded as the “Best Equity House in Turkey” within the frame of Euromoney 2007
Awards for Excellence
Overview of Turkish Capital Markets - 1
EQUITY MARKET (TRY)
TURKISH DERIVATIVE EXCHANGE (TRY)
380,5 bn
344,5 bn
70,2 bn
12,2 bn
2006/1H
2007/1H
2006/1H
2007/1H
 Falling short of expectations, equity market remained relatively weaker in 2007/1H compared to its
performance attained in the first half of 2006. The evolving derivative market also cannibalized
some part of trading volume from the equity market.
 In the process, the derivative market displayed an outstanding performance, beating almost all
estimates with 475% annual surge in 2007/IH. The actual trading volumes reached in this market in
the first half of 2007 has surpassed our year-end target.
Overview of Turkish Capital Markets - 2
BILLS & BONDS MARKET (TRY)
 High volatility and uncertainties in the markets
lead to a visible drop in the trading volume in the
Bills and Bonds Market
420 bn
401 bn
2006/1H
2007/1H
PENSION FUNDS – PORTFOLIO SIZE (USD)
 Pension funds will become the main driving
force of the fund management business. The
portfolio size of pension funds reached USD
2.900 mn as of IH/07 from USD 2.048 mn at the
end of 2006 in the market, growing 41% with
respect to 2006. Note that the AUM from the
pension fund business was merely US$38 mn
back in 2003.
2.900 mn
2.048 mn
913 mn
2005
2006
08/10/2007
Market Share in Equity Market
EQUITY MARKET – İŞ INVESTMENT (TRY)
6,37%
Improving and solidifying
our leadership position
6,27%
23,8 bn
21,9 bn
2006/1H
2007/1H

We strengthened our leadership position in the first half of 2007, increasing our market share to
6,37% from 6,27% compared to the same period of 2006 while our trading volume decreased to
TRY 21.9 bn from TRY 23.8 bn parallel to the contraction in overall market.

The results we achieved in the first half is in line with our targets.
Market Share in Bills & Bonds Market
BILLS & BONDS MARKET – İŞ INVESTMENT (TRY)
Holding one of the first two seats
for more than 16 consecutive
quarters.
13,8%
13,1 bn
12,8 %
8,1 bn
2006/1H
2007/1H
 Our market share declined to 12,8% from 13,8% while our trading volume decreased to TRY 8,1 bn
from TRY 13,1 bn thanks to the sheer contraction in overall market.
 Meanwhile, we have been maintaining our leading positions among the brokerage houses in the
market for more than 4 years.
Market Share in Derivative Market
DERIVATIVE MARKET – İŞ INVESTMENT
17%
New derivative instruments
are in the pipeline
TRY 12 bn
29%
TRY 3,6 bn
2006/1H
2007/1H
 Our derivative trading volume surged to TRY 12 bn with over 252% rise over the same period of 2006.
Our market share retreated to 17% as many players joined to the market . Still, our leadership is
uncontested.
 Our first half trading volume in the derivatives market is quite close to the target figure (TRY 14 bn.)
we had set for the full year.
 Our trading volume will continue to elevate as more new instruments will start trading in the market
iş Investment, as pioneer of the new products, will bolster its leadership via those products.
 Our client base in derivative products is getting wider in each quarter (foreign & domestic).
Trading Volume in International Capital Markets
TRADING VOLUME IN INTERNATIONAL CAPITAL MARKETS
(USD Million)
3.088
893
2006/1H
2007/1H
Our trading volume in international capital markets reached USD 3 bn , surging by 246% with
respect to the same period of 2006.
The share of international derivatives is getting larger portion of the overall volume.
The new instruments will likely give breadth and depth to our increasing volumes in this market.
Asset Management
ASSET UNDER MANAGEMENT - PORTFOLIO SIZE
 We experienced a notable recovery in mutual
(TRY Million)
fund business in IH/2007 following the major
shake out in 2006, which had resulted in
major redemptions from the mutual funds.
6.484
7.043
5.734
 Pension funds surged by 32% on YTD basis in
IH/07.
 50% of İş Asset Management shares were
purchased from İş Bank at the pre-determined price
(TRY 30,5 mn). Now, İş Investment has 70% direct
stake in İş Asset Management.
2005
2006/1H
5.247
2006
2007/1H
PENSION FUND – PORTFOLIO SIZE
(TRY Million)
 İş Asset Management -as 70% affiliate- will be
consolidated to İş Investment’s results starting
from Q3/2007. İş Investment’s IH/07 results
includes merely 20% consolidation of İş Asset
Management.
682
516
306
173
2005
2006/1H
2006
2007/1H
ISDJE – Exchange Traded Fund (ETF)
www.isbyf.com
İş Yatırım Dow Jones Turkey Equal Weighted 15 A Type Exchange Traded Fund - founded
by İş Investment- was listed at Istanbul Stock Exchange on 25th May, 2007 with code of
ISDJE.
Corporate Finance (Public Offerings – M&As)
The largest privatization offering in the ISE: HALKBANK
PUBLIC OFFERING SIZE
(USD Million)
640
1.911
 We became the only listed brokerage house
at the ISE.
708
2007/1H
2006/1H
M&As (USD Million)
90,4
34,9
2006/1H
 We performed the largest privatization
offering in the Turkish capital markets with
Halkbank.
2007/1H
 We executed USD 90,4 mn amounted 2
M&As while it was USD 34,9 mn in the
same period of 2006.
 Our corporate finance revenues
quadruppled to TRY 3.671 mn in QII, jumping
473,6% compared to 1Q/2007 figure.
Subsidiaries
Share in Capital (%)
Q1/2007
Share in Capital (%)
Q2/2007
Maxis Securities
100 %
100 %
Camis Securities
99,79 %
99,79 %
İş Investment Trust
23,60 %
23,60 %
İş Private Equity
20,08 %
20,08 %
İş Asset Management
20 %
70 %
Turkish Derivatives Exchange
6%
6%
Growing Enterprise Market Automatic
Quotation (GEMAQ)
5%
5%
İş REIT
1,37 %
1,37 %
Yatırım Finansman Securities
0,55 %
0,55 %
Title of Corporation
Income Statement
İş Investment
TRY (000)
2006/1H
2007/1H
YoY ▲%
Operating Income:
Interest and trading income
Commission revenues
Income from corporate finance
Other income
1.812
21.353
6.120
5.402
35.567
22.744
3.672
2.820
1,862%
6%
-40%
-47%
Total Operating Revenues
34.687
64.803
86%
Operating Expense
-19.028
- 26.900
41%
Net Operating Profit
15.659
37.903
142%
Other Expenses
-5.454
-2.464
-54%
Financial Expenses
-6.291
- 3.126
- 50%
Minority Expense
8.360
- 18.157
n.m.
EBT
12.274
14.156
15,3%
Tax
-1.899
- 2.659
40%
Net Profit
10.375
11.497
11%
Operating Revenues
TRY (000)
2.819
35.567
5.402
2007/1H
22.744
3.671
2006/1H
21.353
6.120
23.112
21.353
6.120
5.402
3.672
1.812
2.820
33.493
Interest and Trading
Commissions
Corporate Finance Other
 İş Investment’s total revenues amounted to TRY 64.803 mn in 2007/1H, up by 86% on YoY basis.
 Interest and trading revenues displayed a sharp growth, increasing to TRY 35.567 mn from TRY
1.812 mn. The dismal 2006/IH results could be attributed to the low credit volumes and the
negative impact of the turmoil.
 Commission revenues reached TRY 22.744 mn, surging by 173% over QI/07 figure, the
commissions had totaled TRY 21.353 in the first half of 2006.
 Other revenues amounted to TRY 2.819 mn down from TRY 5.402 mn due to the mainly decline in
marked to market value of İş Private Equity.
Brokerage & Trading Commissions (YoY)
(TRY Million)
2007/1H
2006/1H
17,2
15,1
1
4,8
3,2
2,9
0,7
Brokerage
Asset Management
Other
5.064
3.291
2.910
 Brokerage commissions jumped to TRY 17.2 mn, recording roughly 1.5 1.014
x rise in QII over its QI
performance. YoY increase is 14%.
 Commissions on derivatives rocketed by five-folds on YoY basis in 2007/1H, reaching TRY 3.153
mn vs TRY 619K in 2006/1H.
 Fees on asset management rose to TRY 4.8 mn due to the effect of İş Asset Management
consolidation.This account will likely post better results as 70% of İş Asset Management will be
consolidated
Brokerage & Trading Commissions (QoQ)
(TRY Million)
(TRY Million)
BROKERAGE
ASSET MANAGEMENT
17.2
4,8
7.5
0,57
2007/1Q
2007/2Q
(TRY Million)
OTHER
0.7
0.25
2007/1Q
2007/2Q
2007/1Q
2007/2Q
Margin Trading
INTEREST ON LOANS EXTENDED TO CLIENTS (TRY 000)
OUTSTANDING LOANS (TRY Million)
YoY Growth 149 %
69.8
6.454
54.7
49.3
35.2
31.5
2.586
21
2.586
1Q/06
2Q/06
3Q/06
2006
1Q/07
2Q/07
2006/1H
2007/1H
 Interest income on margin accounts recorded 149% YoY growth, reaching TRY 6.5 mn in the first
half of the year, surging by TRY 3.9 mn with respect to the same period of 2006.
 Loans to clients reached TRY 69,8 mn as of 2007/1H, surging by 231% with respect to the same
period of 2006.
Operating Expenses
TRY (000)
Employee Costs
Severance
Depreciation
Goodwill
Consultancy
Operating Costs
Sundry Taxes
Advertisement
Marketing and Dist.
Other
Total
2006/1H
2007/1H
YoY ▲
8.998
96
617
-163
778
3.744
330
698
12.782
133
609
-728
337
7.040
277
298
42%
39%
-1,3%
347%
-57%
88%
-16%
-57%
615
3.315
19.028
2.193
3.959
26.900
257%
19%
41%
 Operating costs recorded 41% rise on YoY basis.
 The cost structure includes several one-off expenses such as IPO expenditures.
 Foreign marketable security transaction shares and other marketing, selling and distribution
expenses also emerged as important cost components of operating expenses in the first half.
 A rise in employee expenses was observed in 2007/1H as indicated in 1Q/2007.
Private Equity
İş Private Equity H1/2007 Results
Developing Private Equity Business
 İş Private Equity announced a net income of $0.7
 Private
equity
activities
have
increased
considerably over the last two years in Turkey.
mn in H1/2007.
 Revenues of $12.6 mn in H1/2007 include mostly
 Completed exits of İş Private Equity are Cinemars,
the sales proceeds from the Tuyap exit in February
2007 (at a price of $10.8 mn). The remaining
revenue comes from Nevotek (a leading IP
telephony application software developer), the only
company İş Private Equity currently fully
consolidates.
İş Private Capital Track Record
Investments
Firm
Probil
ITD
Nevotek
Step Hali
Beyaz Fleet
Cinemars
Tuyap
Ode
3.2
1.9
3.0
3.5
4.0
11.5
7.0
5.0
 İş Private Equity’s most recent investment in July
was in Ode Insulation, a building materials
company. The equity investment was $5 mn for a
17.24% stake.
Exits
Investment
$
$
$
$
$
$
$
$
30.25% annual yield in USD terms and Tuyap,
45.75% annual yield in USD terms.
mn
mn
mn
mn
mn
mn
mn
mn
Firm
Cinemars
Tuyap
Exit Price
IRR(1)
$ 19.4 mn
$ 10.8 mn
30.25 %
45.75 %
 New projects are in the pipeline to be finalized in
the second half of the year.
(1) IRR in USD terms
İş Private Equity is the leader with profitable investments in the fast growing private equity market
20
Maxis Securities
 Maxis Securities was established in one of the world financial centers
London, UK with in the target of expanding its business lines to
international capital markets.
 We expect the company to be fully in operation in QIII/07 as all the legal
procedures have recently been completed.
 Maxis started to open new client accounts, which will likely expedite in
the periods to come
Comments on Profit
 The first half profit confirms our year-end profit estimate.
 Full consolidation of İş Asset Management that started in QII/07 (merely
20% was consolidated) led the portfolio commissions to jump to TRY 4.8
mn in IH/07. The effect of 70% consolidation will be seen in next quarter.
 İş REIT shares amounted to nominal TRY 6.63 mn (TRY 13.3 mn in market
value), which are held in our accounts, form a potential profit for İş
Investment.
 There are numerous corporate finance related projects in the pipeline
that might significantly elevate our corporate finance revenues in the
second half.
 We have been waiting for the legal approval for our new mutual funds.
İŞ INVESTMENT
HEAD
OFFICE
Is Kuleleri Kule-2 Kat 12
4. Levent 34330 Istanbul
Ph: (0212) 350 20 00
Fax: (0212) 325 12 26 – 325 12 48
ANKARA
BRANCH
IZMIR
BRANCH
Talatpasa Bulvari No:27
Alsancak 35220 Izmir
Ph: (0232) 488 90 00
Fax: (0232) 464 69 43 – 464 68 98
YENIKOY
BRANCH
KALAMIS
BRANCH
Fenerbahce, Fener Kalamis Cad.
Tibas-Belvu Sitesi A2 Blok Daire 3
Kadikoy 81030 Istanbul
Ph: (0216) 542 72 00
Fax: (0216) 542 72 01
LEVENT
LIAISON
OFFICE
ALMA ATA
LIAISON
OFFICE
181 Zheltoksan St. The Regent
Almaty
Oda 108 Almaata 480013
Kazakhstan
Ph: (+73272) 505000
Fax: (+73272) 582805
SUBSIDIARY
Tahran Cad. No:3/8
06700 Kavaklidere - Ankara
Ph: (0312) 455 26 50
Fax: (0312) 466 26 62
Koybasi Caddesi Iskele Cikmazi No
277
34464 Yenikoy ISTANBUL
Ph: (0212) 363 01 00
Fax: (0212) 363 01 01
Yapi Kredi Plaza C Blok Kat 9
Bolum
25/B 34330 Besiktas, Istanbul
Ph: (0212) 282 00 18
Fax: (0212) 282 00 19
MAXIS SECURITIES LTD
8 Princes Street
London EC2R 8HL UK
Ph: (+44207) 397 1431
Fax: (+44207) 726 2566
23
www.isyatirim.com.tr
www.isinvestment.com
The information in this report is prepared by “İŞ YATIRIM MENKUL DEGERLER A.Ş.” (İş
Investment) and it is not to be construed as an offer or solicitation for the purchase or sale of
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opinions and comments contained in this material are not under the scope of investment
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in this report may involve significant risk, may be illiquid and may not be suitable for all
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subject to change without notice. Any form of reproduction, dissemination, copying, disclosure,
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cannot be held responsible for any errors or omissions or for results obtained from the use of
such information.