Turkey Financial News

Posted by meb at September 15th, 2009

The worst bear run since the Great Depression is now in the midst of one of the most stunning reversals of all time.
After shedding historic amounts, the İstanbul Stock Exchange (İMKB) as well as markets around the world have performed near miracles, with US equities rallying more than 50 percent and the İMKB gaining more than 65 percent.

But is the rally sustainable? While analysts in the West appear to be divided, in Turkey there appears to be a general consensus that we remain in a cyclical bull market. Given the relatively lackluster economic signs in the developed world, investors are increasingly beginning to question this.

Autumn is traditionally a time where markets cool. Nonetheless, in Turkey and elsewhere, investors continue moving their investments into riskier stocks and out of such safe haven investments as Turkish government bonds.

“Turkey is under-leveraged,” said Murat Berk, a senior analyst at YapıKredi. “But we can’t say this in the Anglo-Saxon world. The Western world is coming to the end of the credit leverage sector. Turkey is at the beginning,” he said, suggesting that Turkey would likely continue to be affected by dynamics quite different from those in the West. (more…)

Posted by meb at September 15th, 2009

Turkey will probably reduce its key rate this week, making it only the third G-20 member to continue cutting borrowing costs, highlighting the depth of a recession the prime minister once forecast the country would avoid.

The Bank will lower its overnight borrowing rate by half a percentage point to 7.25 percent on Sept. 17, according to 23 of 24 economists surveyed by Bloomberg. The other analyst forecast a quarter-point reduction.

Another half-point reduction would bring Turkey’s rate cuts in the past 12 months to 9.5 percent, more than any other of 50 central banks tracked by Bloomberg except Moldova. Eleven months after Prime Minister Recep Tayyip Erdogan declared the global crisis would “barely touch” Turkey, the country has lost more output than 30 other economies in a study by DekaBank Deutsche Girozentrale.

“Except for the politicians in Ankara, whoever you talk to — in construction, real estate, manufacturing — there’s a consensus that this has been by far the worst ever,” said Tevfik Aksoy, an economist at Morgan Stanley in London.

Turkey’s gross domestic product, or GDP, shrank an annual 7 percent in the second quarter, after contracting a record 14.3 percent in the previous three months, the statistics office reported on Sept. 10. (more…)

Posted by meb at September 10th, 2009

Explaining the main points of the record-breaking tax fines against Doğan Media Group, Soner Gedik, the group’s chief financial officer, says the levy has no legal basis. The levy rests upon the claim that share transfers are not exempt from value added tax, but the law clearly states the opposite, Gedik says. Meanwhile, a brokerage says the tax decision has hit investor confidence in Turkey

Evaluating the record 3.755 billion Turkish Liras ($2.5 billion) tax levy imposed on Doğan Media Group, Chief Financial Officer Soner Gedik said the decision has no legal ground. Gedik’s arguments against the fine, the second against the group this year, were also supported by a prominent tax expert.

Speaking to daily Vatan, Gedik answered questions about the fine, emphasizing that transfer of shares is a practice exempt from value added tax, or VAT, and the share transfer between Doğan Media Group, or DMG, companies, created no extra revenue for the group. Gedik also estimated that in the past four years, share transfers surpassing $128 billion have been conducted in Turkey. “Nearly three-fourths of this amount was conducted as common stock transfer [as was the case in DMG],” he said. “After this [practice] against us, I guess all such sales will be regarded as cloudy. If the interpretation of the Finance Ministry official is correct, all these sales will be inspected.” (more…)

Posted by meb at September 10th, 2009

Shares in Doğan Yayın Holding, the media subsidiary of the Doğan Group, fell 10 percent on Wednesday in the first trading session of the İstanbul Stock Exchange (İMKB), following Tuesday’s 20 percent decline on news of a $2.53 billion fine.
Investors are now jumping ship from the media mogul for a second straight day after it was hit with a record fine for unpaid taxes. Doğan Yayın traded down 10.7 percent at TL 1.17. Hürriyet Gazetecilik shares tumbled 10.4 percent while Doğan Holding shares plummeted by 8.3 percent. The main share index was off 1 percent.

Doğan Yayın Holding, the Doğan Group’s publication wing, which runs newspapers such as Hürriyet and Milliyet, numerous magazines and TV stations, was hit by a TL 3.76 billion ($2.53 billion) fine on Tuesday. The Finance Ministry said they levied the fine on the company for evading taxes during a time period covering 2005, 2006 and 2007. (more…)

Posted by meb at July 18th, 2009

The Central Bank of Turkey again slashed its benchmark interest rate on Thursday evening, this time by 50 basis points, representing the ninth month in a row that rates have been cut. The overnight borrowing rate now stands at a record low of 8.25 percent — a full 8.5 percentage points lower than the 16.75 percent overnight borrowing rate in September.

The bank has suggested that more cuts are in store. In a written statement accompanying the announcement, the bank said it was likely for the cuts to continue, noting, “Recent data releases signal that the recovery in domestic economic activity will be slow and protracted.”

Because inflation concerns remain a distant possibility, “it will be necessary for monetary policy to maintain an easing bias for a long period of time,” the statement read, adding that the bank “envisages that further rate cuts will be necessary in the short term unless there is a robust recovery in economic activity.”

Indeed, first quarter gross domestic product (GDP) contraction clocked in a record 13.8 percent, driven in large part by slumping domestic demand, plummeting exports and a fall of 17.4 percent in industrial production. (more…)

Posted by meb at May 27th, 2009

Moody’s Investors Service said on Wednesday that Turkey would need IMF financing later this year due to pressure on its external deficits but has room to do without a deal in the summer months.

Negotiations between Turkey and the IMF have so far failed to produce a loan accord, expected to reach $45 billion, due to differences over public sector spending and fiscal reforms.

A $10 billion IMF stand-by agreement expired in May 2008 and the current talks are aimed at a new three-year stand-by deal, but the government is increasingly reluctant to agree to demands from the fund for spending cuts. (more…)

Posted by meb at April 28th, 2009

The share of foreign investors in the stocks trading at the Istanbul Stock Exchange, or IMKB, has increased compared to last week, and stood at to 63.05 percent as of April 24.

The share of foreigners in the number of stocks owned stood at 51.74 percent, while, the ratio in total market value stood at 63.05 percent. The latter figure was 63.01 percent as of April 17. As of April 24, foreign investors are holding 12.765 billion shares, worth 45.415 billion liras.
source: Hurriyet daily news

Posted by meb at April 5th, 2009

Scores of individuals, including Duncan Blake, a Scottish executive and president of food processing company Merko, are detained in an operation targeting stock manipulation and insider trading. According to allegations, the suspects inflated shares of four companies, in collaboration with company executives, pocketing millions of dollars in illegal profiteering

Turkish police detained 54 individuals on Thursday in an operation described as a crackdown on the biggest manipulation in the history of the Istanbul Stock Exchange.

Duncan Blake, a Scottish executive and head of the British Chamber of Commerce in Turkey was among those detained. Blake is the president of Merko, a food processing company.

The manipulation is alleged to have created illegal profiteering to the tune of 20 million Turkish Liras, or $12.5 million. (more…)