IS INVESTMENT
Financial Results & Performance
2007/Q3
About Us
Is Investment was established by Is Bank in 1996, with a paid in capital of NTL 500.000. The
company has started with 42 staff and reached 272 employees as of 2007/Q3 and
shareholders’ equity increased to NTL 235.9 mn. at the same time.
Is Investment - the investment arm of Is Bank and the leading investment banking institution
in Turkey - 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&A’s and strategic consultancy)
 Research
2
Overview of Turkish Capital Markets - 1
Equity Market (NTL Billion)
Bills & Bonds Market (NTL Billion)
574.5
579.3
575.5
513.9
2006/Q3
2007/Q3
Equity market displayed a better performance with
respect to the same period of 2006
2006/Q3
2007/Q3
The comparative low uncertainities on politic area in 2007/Q3,
led the Bonds & Bills market trading volume almost catch up
with 2006/Q3.
3
Overview of Turkish Capital Markets - 2
Derivative Market (NTL Billion)
Mutual Funds (USD Million)
Pension Funds
144.1
29.268
25.010
20.271
21.4
2006/Q3
913
2007/Q3
2005
Derivative market displayed a paramount performance and
reached more than two-folds of our year-end trading
volume target, growing 571% compared with 2006/Q3
2.048
2006
3.677
26/10/2007
Portfolio size of pension funds still keep on becoming the
driving force of the fund management business, rising 78%
with respect to the end of 2006
4
Overview of Turkish Capital Markets - 3
Number of Public Companies Traded on the ISE
Average Free Float Rate (%)
326
322
31,6
30,9
306
2005
31,4
2006
2005
2007/Q3
Market Capitalisation ($ Billion)
285.8
163.7
162.8
2005
2006
5
2007/Q3
2006
2007/Q3
Overview of Turkish Capital Markets - 4 (Foreign Investors)
Trading Volume / Total Equity Trading Volume (%)
Share in Total Equity Portfolio (%)
72
67
30
67
59
18
51
19
12
9
2003
2004
2005
2006
2007/Q3
2003
2004
2005
2006
2007/Q3
Foreign investors trade 30% of the ISE trading volume, while they hold the 72% of the free float market capitalisation
6
Market Share in Equity Market
Equity Market - Is Investment (NTL Billion)
6,33%
6,38%
36.3
Our performance is in line with
our targets.
32.8
2006/Q3
2007/Q3
We maintain our leadership position as of 2007/Q3 with NTL 36.3 bn trading volume and 6,33% market share
7
Market Share in Bills & Bonds Market
Bills & Bonds Market - Is Investment (NTL Billion)
13,65%
12,43%
16.9
11.3
2006/Q3
2007/Q3
We hold one of the first leading ranks with 12,43% market share and 11.3 bn trading volume and it is expected to
see a recovery in the market with the issuance of private sector bonds in 2008
8
Market Share in Derivative Market
Derivative Market – Is Investment (NTL Billion)
17,53%
25.2
Quite close to the two-folds of
our year-end target
27,4%
6.1
2006/Q3
2007/Q3
 Our derivative market trading volume is already quite close to the two-folds of our year-end target figure (NTL 14 bn) we
had set for the full year, reaching NTL 25.2 bn.
 We maintain our uncontested leadership as of 2007/Q3 with 17,53% market share despite the rise in the market players.
 Our client base in derivative products continue to get wider in each quarter as stated before (foreign & domestic).
9
Trading Volume in International Capital Markets
International Capital Markets – Is Investment (USD Billion)
12.5
1.2
2006/Q3
2007/Q3
Our trading volume reached USD 12.5 bn from USD 1.2 bn surging by ten-folds of the same period of 2006 and our trading
volume will likely increase with the anticipated new instruments in international capital markets
10
Asset Under Management
AuM & Pension Funds Portfolio Size – Is Asset Management (Million NTL)
173
682
777
410
7.043
516
6.620
The portfolio size of pension
funds grows in parallel with
the overall market
6.484
6.003
5.247
2005
2006/Q3
2007/H1
2006
2007/Q3
The growth trend of mutual funds kept rising in 2007/Q3 due to the new accounts and the rise in current portfolios and
reached NTL 6.6 billion, after the major shake out in 2006
11
Corporate Finance (Public Offerings - M&As)
Public Offering Size (USD Million) - Is Investment
M&As Size (USD Million) - Is Investment
1.911
341
708
34.9
2006/Q3
2007/Q3
2006/Q3
2007/Q3
The largest domestic demand for
Tekfen Holding
among the private sector IPOs
We executed USD 341 mn. amounted 6 M&As while it
was USD 34,9 mn. in the same period of 2006 and new
corporate bond and IPO projects are in the pipeline
The largest privatization offering in the Turkish capital
markets - Halkbank - completed this year
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Income Statement
Is Investment
2006/Q3
2007/Q3
YoY ▲%
Interest and Trading Income
17.150
56.676
230
Commission Revenues
29.513
37.093
25
Income from Corporate Finance
6.653
5.125
-22
Other Income
7.340
4.864
-33
Total Operating Revenues
60.656
103.758
71
Operating Expense
-30.204
-41.884
38
Net Operating Profit
30.452
61.874
103
Other Expenses
-7.944
-4.324
45
Financial Expenses
-7.802
-4.100
47
-406
-26.760
n.m.
EBT
14.300
26.690
86
Tax
-1.847
-5.260
184
12.453
21.430
72
NTL (000)
Operating Income
Minority Expense
Net Profit
13
Operating Revenues
(NTL 000)
56.676
2006/Q3
2007/Q3
37.093
29.513
17.150
7.340
6.653 5.125
Interest and Trading
Commissions
Corporate Finance
4.864
Other
 Is Investment’s total revenues amounted to NTL 103.7 mn in 2007/Q3, up by 71% on YoY basis.
 Interest and trading revenues displayed a sharp growth, increasing to NTL 56.6 mn. from NTL 17.1 mn. The dismal 2006/Q3
results could be attributed to the low credit volumes and the negative impact of the turmoil.
 Commission revenues reached NTL 37.1 mn, surging by 63% over 2007/H1 figure, the commissions had totaled NTL 29.5 in the
period of 2006/Q3.
 Other revenues amounted to NTL 4.8 mn down from NTL 7.3 mn due to the mainly decline in marked to market value of Is
Private Equity.
14
Brokerage & Trading Commissions (YoY)
(NTL 000)
28.647
2006/Q3
2007/Q3
20.544
7.468
4.462
4.507
978
Brokerage
Asset Management
Other
 Brokerage commissions reached NTL 28.6 mn. recording 39% rise over its 2006/Q3 performance.
 Commissions on derivatives rocketed by five-folds on YoY basis in 2007/1H, reaching NTL 5.7 mn. vs NTL 1.1 mn
in 2006/Q3.
 Fees on asset management rose to NTL 7.4 mn. due to the effect of 70% consolidation of Is Asset Management
started in 2007/Q3.
15
Margin Trading
Outstanding Loans (NTL Million)
Interest on Loans Extended to Clients (NTL Million)
67.1
10.4
35.2
4.1
31.5
21
06/Q1
06/Q2
06/Q3
2006/Q3
07/Q3
2007/Q3
Interest income on margin accounts recorded 153% YoY growth, reaching NTL 10.4 mn and loans to clients reached
NTL 67.1 mn as of 2007/Q3 surging by 91% with respect to the same period of 2006
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Operating Expenses
NTL (000)
2006/Q3
2007/Q3
YoY ▲
Employee Costs
Severance
Depreciation
Goodwill
Consultancy
Operating Costs
Sundry Taxes
Advertisement
15.233
188
898
-253
1.853
5.922
3.841
1.198
19.648
170
905
-598
1.650
9.694
5.232
903
28%
-9%
0.7%
136%
-11%
63%
36%
35%
Marketing and Dist.
Total
1.324
30.204
4.280
41.884
223%
38%
Operating costs recorded 38% rise on YoY basis and foreign marketable security transaction shares and other marketing,
selling and distribution expenses also emerged as important cost components of operating expenses in 2007/Q3
17
TradeMaster International (TMI) – A New Product
With the incentive marketing, many requests recieved for the initial
and unique application for the e-trade platform in the country -TMI-
To perform stock and forward contract transactions in various global stock exchanges
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TradeMaster International
Features
 Allows investors to reach information on the global markets in detail and in real time and to perform stock and forward contract transactions in various global stock exchanges
quickly and easily with access to pertinent information.
 Allows investors to undertake transactions in various global stock markets with detailed and real-time information.
 Allows investors to carry out visual and statistical analysis using various techniques on detailed and real time data.
 This application enables investors to carry out transactions and keep a watch on their investments in global markets from their own PC or any location with internet access.
 TradeMaster International allows investors to reach global markets directly and quickly through simple menus.
 Each time it is opened, TradeMaster International automatically downloads and installs any new versions. As a result, new versions are always updated, and the program allows
investors to work with an updated version
 Provides additional security for its investors through various channels of security within its software.
Advantages
 Limits on investor accounts, specified by Is Investment, may be uploaded to the program and investors can perform the required transactions in international markets within
specified limits.
 Ensures speed and ease for investors in their transactions in global markets.
 The program allows investors to perform transactions directly and without the need for any other intermediary.
 The program allows investors to access global market data in detail and in real time
Investor Profile
Traders interested in global markets and various products in these markets.
 Investors seeking to follow their investments closely while on business or personal travel.
 Those who use visual and statistical analysis in reaching investment decisions, and those who would like to carry out such analysis independently.
 Those who place importance on speed in their transactions.
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Conclusion
 2007/Q3 profit enforces our estimates to exceed the year-end profit target.
 We maintain our dividend policy disclosed to the public (minimum 20% of the distributable profit).
 Maxis Securities - the full subsidiary of Is Investment - started to welcome the client accounts and started to deal and it is planned to
increase our international capital markets efficiency with Maxis.
 There are 2 corporate bond issue projects that will be finalized in the last quarter and 2 IPO’s are also in the pipeline for the year 2008.
 70% consolidation of Is Asset Management that started in 2007/Q3 positevely effected our profit as stated before.
 Akaretler Branch has gone into operation in Istanbul as the 5th branch of Is Investment and the 6th one will probably be seen in 2008.
 TradeMaster International (TMI) has already been requested by many investors, and also theTradeMaster (the domestic form of TMI)
 Some institutional investors apply Is Investment to establish new funds which are to be managed by us.
 CMB approval for our capital-guaranteed fund is waited to be finalized in the last quarter.
 We have set out a new and active marketing policy in cooperation with the private banking department of Isbank.
 Foreign investors will be able to trade directly at ISE-Equity market via GL Trade served by Is Investment in the last quarter.
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The information in this report is prepared by “IS YATIRIM MENKUL DEGERLER A.S.” (İş Investment) and it is not to be
construed as an offer or solicitation for the purchase or sale of any financial instrument or the provision of an offer to
provide investment services. Information, opinions and comments contained in this material are not under the scope of
investment advisory services. Investment advisory services are given according to the investment advisory contract,
signed between the intermediary institutions, portfolio management companies, investment banks and the clients.
Opinions and comments contained in this report reflect the personal views of the analysts who supplied them. The
investments discussed or recommended in this report may involve significant risk, may be illiquid and may not be
suitable for all investors. Therefore, making decisions with respect to the information in this report cause inappropriate
results.
All prices, data and other information are not warranted as to completeness or accuracy and are subject to change
without notice. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or
publication of this report is strictly prohibited. The information presented in this report has been obtained from sources
believed to be reliable. Is Investment cannot be held responsible for any errors or omissions or for results obtained
from the use of such information.
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IS INVESTMENT SECURITIES
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
ALMA ATA
LIAISON
OFFICE
181 Zheltoksan St. The Regent Almaty
Oda 108 Almaata 480013 Kazakhstan
Ph: (+73272) 505000
Fax: (+73272) 582805
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
AKARETLER
BRANCH
Akdeniz Cad. No:14 Birsel İş Merkezi
Daire: 601 35210 Alsancak / İZMİR
Ph: (0232) 488 90 00
Fax: (0232) 488 90 01
LEVENT
LIAISON
OFFICE
Yapi Kredi Plaza C Blok Kat 9 Bolum
25/B 34330 Besiktas, Istanbul
Ph: (0212) 282 00 18
Fax: (0212) 282 00 19
SUBSIDIARY
MAXIS SECURITIES LTD
8 Princes Street
London EC2R 8HL UK
Ph: (+44207) 397 1431
Fax: (+44207) 726 2566
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