Turkey Financial News

Turkey determined to run for electric car race

meb — Mon, 25 Feb 2013 11:50:26 +0000

Turkish state institutions are set to provide full support to local electric car production as Turkey’s science agency will provide 100 percent in research aid while the Science Ministry is promising to buy 200 electric cars over five years.

“Turkey will make a name for itself with domestic electric car production and development,” Turkish Science, Industry and Technology Minister Nihat Ergün has said, adding that Turkey did not want to miss the opportunity to have a say in the electric car sector, as it has lost out before in the fossil fuel vehicle technology sector.

The news about electric car production follows on the heels of a recently introduced revision to provide incentives to the automotive sector in general.

The Scientific and Technical Research Council of Turkey (TÜBİTAK) will grant 100 percent in research and development support for electric car producers, Ergün said, adding that this endeavor was expected to result in a collaboration of universities, as well as private and public sector players.

The ministry is also promising to buy 200 electric cars in five years.

The first step in Turkey’s program to become a player in the electric car market will be the production of a critical section of the electric car domestically, guided by universities and private and government research and development institutions.

The design of the vehicles, as well as the development of the batteries, electric motors and vehicle control systems, will be conducted in the first stage. The domestic electric car will be produced by production bodies later by putting these locally produced sections together, Ergün said.

The project proposals, which need to be developed domestically to a maximum level, are expected to be presented to TÜBİTAK by May 24.

The electric cars to be developed should be suitable for popular inner-city utilization or public transport, driven by electricity and be at least four-wheeled land road vehicles, but the classification of the vehicles will be done by TÜBİTAK regarding domestic and foreign market competition conditions.

Turkish largest private airline goes public

meb — Mon, 25 Feb 2013 11:48:18 +0000

Pegasus, Turkey’s largest private air carrier, is planning to open up its shares to the public, according to the company.

The company applied to the Capital Markets Board (SPK) for a public offering on Feb. 22; the shares are expected to be opened either this year or next year.

The company initiated research in 2011 with the intention of setting up an initial public offering (IPO) earlier but had to postpone the plans due to waning investor interest in capital markets during the global financial crisis.

Pegasus Airlines signed the biggest aircraft deal in Turkish aviation history this past December, ordering 100 Airbus jets worth $12 billion in an agreement that has pleased government officials.Founded in 1990, and bought by Esas Holding in 2005, Pegasus has grown its fleet from just two aircraft to more than 40 mostly Boeing 737-800s over the past two decades. The airline serves 62 destinations in 26 countries.

Company CEO Sertaç Haybat stressed that Pegasus Airlines had flown 49 million passengers since launching.

Board hears 12 banks’ defense in rate-fixing case

meb — Mon, 25 Feb 2013 11:44:05 +0000

Turkey’s Competition Authority (RK) hears the defense today of a dozen banks under investigation for alleged collusion in setting loan rates.
The RK will hear the banks’ cases at 10 a.m. at its headquarters in Ankara. The verdict is expected in the following 15 days. RK said back in November it would seek to issue a collective fine worth TL 4.8 billion ($2.65 billion) if it finds the banks guilty of colluding on interest rates. The 12 banks, which include the country’s four largest banks — Akbank, Garanti Bank, İş Bankası and Ziraat Bankası — allegedly agreed to cooperate and set interest rates as high as 14 percent for customers, an RK investigation dating back to November 2011 says. The 14 percent interest rate that the banks allegedly set approaches the upper end of the government’s interest rate corridor, and though the number is not illegal, the collusion between banks to keep the rate at an upper limit is strictly against the country’s banking regulations. The other banks in the inquiry include DenizBank, Finansbank, HSBC, ING, Türk Ekonomi Bankası (TEB), HalkBank, VakıfBank and YapıKredi.

The investigation comes at a time of heightened pressure for the country’s strongest banks as they find themselves faced with the competition of a growing number of foreign banks applying for operating licenses in the country. Underlying the interest of foreign lenders is high profitability in Turkish finance markets. Turkish banks earned TL 23.64 billion ($13 billion) in profits last year, a year-on-year 19.2 percent increase. In addition, Turkish banking industry assets totaled $770 billion by the end of 2012, a 12.6 percent increase over 2011.

If the RK investigation finds the banks guilty, it will not be the first time the body has fined some of the country’s largest banks. In 2011, the RK fined Akbank, Garanti, İş Bankası, VakıfBank, YapıKredi, DenizBank and Finansbank a collective TL 72.3 million over a similar collusion agreement.

Samsun-Kavkaz ferry line to link Turkey with Russia, Central Asia

meb — Wed, 20 Feb 2013 05:22:16 +0000

The first integrated rail and ferry line between Russia and Turkey officially opened on Tuesday, inaugurating what officials say will be a new chapter in trade between the two countries and the region at large.
In a Tuesday ceremony at the Turkish Black Sea port of Samsun, Transport and Communication Minister Binali Yıldırım and his Russian counterpart, Maksim Sokolov, spoke to the press on the importance of the line, which will be the most direct trade corridor between the two Black Sea neighbors. Yıldırım said that the agreement will see as much as 200,000 tons of rolling stock this year, a number which he estimated would reach around 300,000 tons in five years. “This line will help us reach our trade targets, which is not an easy task but something I’m sure can be achieved,” said Sokolov.

The two countries have a mutual goal of increasing their trade volume to “$100 billion by 2015,” said Yıldırım. The highly ambitious figure comes as Turkey-Russia trade amounted to around $33 billion last year, a 10 percent gain on trade volume in 2011. While much of that was due to buyouts and a Russian contract to build a nuclear power plant in southern Turkey, both governments have said that closer trade links carry major opportunities for upping trade.

The trade line will have broader benefits for the region too, said Yıldırım, who told the Anatolia news agency: “This is not just a transport network between Russia and Turkey. This is a critical line for goods from the Balkans passing through Anatolia, and goods headed to Central Asia or the Middle East.” The Samsun ferry terminal, construction of which began in 2005 and cost around TL 10 million, connects to railways at the port of Kavkaz in Russia, and will later see service to the port of Varna in Bulgaria and Poti in Georgia.

The current Turkey-Russia route will also open up markets for both countries, allowing Russia easier access to the Middle East and Central Asia, and Turkey access to the former Soviet bloc. Trade officials in Russia have said it will help ease trade for the Transport Corridor Europe-Caucasus-Asia (TRACECA), a set of countries in those regions which pledged to promote freer cross border trade in 1993.

The project will also ease railway trade with the opening of a facility in Samsun to change wheel carriages according to rail gauge, which is different in the two countries.

Russia and Turkey meanwhile are looking to capitalize on each others’ growth to survive recession elsewhere. Turkey grew 2.5 percent in 2012, while the Russia government says its economy grew by 3.4 percent last year. The numbers are better than those in Europe, which saw an overall contraction of around 2.3 percent in 2012.

Despite intense disagreements over the political future of Syria, the two powers have pledged in recent months to also boost trade by adopting a streamlined customs process. Russia has also been keen to emphasize its economic relations with Turkey because Ankara is one of the largest buyers of its natural gas and oil. Turkey bought around 2 million tons of crude last year and 27 billion cubic meters of natural gas.

“Russia firmly holds second place in the world among Turkey’s trade and economic partners,” Russia President Vladimir Putin said in December. Echoing that sentiment on Tuesday, Sokolov said, “This railway is a historic step in this partnership, brining economic integration and new possibilities for commerce.”

source: Todays Zaman

Private sector foreign debts rise by $11.2 bln year-on-year

meb — Wed, 20 Feb 2013 05:20:52 +0000

Foreign financing debts of the Turkish private sector rose by $11.2 billion between December of 2011 and 2012, according to data released by the Central Bank of Turkey on Tuesday.
The increase adds to existing debt and brings the total amount of foreign debt owed by Turkish businesses to $137.6 billion at the end of 2012. When evaluating the numbers against the data of the previous year, the loans of non-banking financial intuitions increased by almost $1 billion while the loans of non-financing institutions rose by $3.2 billion.

Also, the data showed that out of $137.6 billion, 59.7 percent of the loans were taken out in dollars and 34.9 percent in euros, with the remaining in other currencies. The loans taken out by non-financial institutions take up a share of 61.4 percent in total debt with a value of $84.4 billion. Of this debt, 59.4 percent is held by the service sector, 39.9 percent by industry and 0.7 percent by agriculture.

Natural gas reserves found in Istanbul’s Silivri

meb — Wed, 20 Feb 2013 05:18:59 +0000

Natural gas reserves have been found in İstanbul’s Silivri district, Turkish media reported on Tuesday.
An exploratory drilling operation headed by Merty Energy has reached a natural gas deposit at a depth of some 500 meters in the Çayırlık-1 field, the company’s officials said.

Merty Energy CEO Ongun Yoldemir was quoted by Reuters as saying, “Drillers will also look for natural gas deposits in the Damlıca-1 field after tests are completed.”

Any discoveries made by oil companies and the state-run Turkish Petroleum Corporation (TPAO) are sure to come as welcome news to Turkey, which imports nearly all of its natural gas and is looking for ways to lessen dependency on its foreign suppliers. According to a report released last year by British Petroleum (BP), Turkey was ranked third after China and Greece for rising natural gas costs, at 17.3 percent, with Turkey responsible for 1.4 percent of world natural gas consumption. Oil use also increased by 5.8 percent in 2011 compared to 2010.

More Turkish banks on foreign buyers’ radar, Fitch says

meb — Thu, 17 Jan 2013 14:23:51 +0000

A strong economy and resilient banking sector will likely attract more foreign banks seeking Turkish bank acquisitions this year, Fitch Ratings said in a written note on Monday.
The rating agency said possible acquisitions of Turkish banks by foreigners could improve the credit ratings of the banks purchased “because buyers are likely to be more highly rated.”

“Turkey’s medium-sized banks are the most likely acquisition targets because of uncertainty about the long-term sustainability of their operations as independent entities. … The sector’s healthy credit fundamentals, market size [including a large bankable population] and the broadly favorable outlook for Turkey’s economy make it particularly attractive,” Fitch said. Fitch cited good liquidity, held up by a stable retail deposit funding base, low leverage, still wide margins by international standards and strong credit demand as factors for Turkey’s strong banking sector. “But a return to rapid loan growth could lead to a build-up of risks in the system,” it added.

Also referring to interest in Turkish financial institutions from Gulf investors, Fitch pointed to possible new attempts from Gulf investors to enter the Turkish banking market due to “the desire to diversify out of their home country’s narrow economy.” Turkey’s Alternatifbank has recently announced that it is in talks with the Commercial Bank of Qatar regarding the sale of a majority stake. This followed an announcement by Qatar National Bank of its interest in acquiring an undisclosed Turkish bank.

Ernst & Young: Outlook positive for 2013 as investors eye Turkey

meb — Thu, 17 Jan 2013 14:22:55 +0000

Turkey saw a record number of mergers and acquisitions (M&As) in 2012, an indication that 2013 may be a strong year for foreign and domestic investment, global consultation and auditing firm Ernst & Young told journalists gathered at a press breakfast on Wednesday.
The country saw 184 M&As by Turkish firms and 131 by foreign firms last year, with a total public value of around $23.2 billion. Clients often request to keep the value of their deals confidential, and the total value of M&As in Turkey last year might in fact be around $30 billion, Ernst & Young officials stated.

“The $23.2 billion in public deals compares favorably with the dismal $3.9 billion M&As seen in 2009 or the $11.5 billion in 2011,” said Ernst & Young corporate finance manager Müşfik Cantekinler, who argued that the numbers revealed that “investor confidence in the Turkish market has now returned to pre-crisis levels.”

And while the total value of those deals is back where it was four years ago, the absolute number of M&As in 2012 was 50 to 75 percent higher that the number seen in the three high-growth years before the crisis. “It shows an impressive growth in activity. Though the size of the deals may be smaller, more companies in Turkey show growing ambition and there is more interest in Turkey from investors abroad,” said Cantekinler.

Growing investments may seem like a foregone conclusion as Turkey basks in its upgrade from ratings agency Fitch late last year, a well-performing stock market and surging exports figures. But while that gives investors an alternative to the gloomy outlook elsewhere in Europe, “Our positive assessment is driven by some strong internal indicators, more than just a negative investment climate elsewhere,” said Cantekinler. “In energy, infrastructure and industry there are plenty of chances for a serious level of expansion.”

The energy industry saw just under $7 billion in M&As last year, while the transportation and financial services sector saw $6.9 billion and $4.3 billion, respectively. “There has also been investment activity in consumer sectors, especially food and drinks,” said Cantekinler, who said the target of much investment has been profiting on domestic consumption, which has soared in the last decade.

Consumer confidence index falls by 0.2 points in December

meb — Thu, 17 Jan 2013 14:18:04 +0000

According to data released by the Turkish Statistics Institute (TurkStat) on Wednesday, the consumer confidence index fell by 0.2 percent in December, down to 89 points.
The data, which is prepared by TurkStat in cooperation with the Central Bank of Turkey, review the current purchasing power of consumers as well as consumers’ estimated purchases in the future. The favorability of the existing period for purchases of durable consumer goods is also included. The fall in the index is a result of worsening consumer evaluations. The largest fall was seen in the current purchasing power category.

The index was 89.2 points in November. In December, the purchasing power index also fell to 84.9 from 86.3 compared to the previous half. The responses of participants in the survey were sufficiently positive to push the general economic forecast index for the coming three months up from 86.3 in November to 86.6 in December.

The expectations of survey takers regarding the possibility of finding jobs in the next six months also rose from 90.4 percent in November to 91.3 percent in December.

Contractors pin hopes on gov’t for repayment of debts in Libya

meb — Thu, 03 Nov 2011 09:11:51 +0000

Turkish contractors, long unable to receive payments for projects in an unstable Libya, woke up Wednesday with renewed hope as Economy Minister Zafer Çağlayan arrived in Tripoli to discuss a solution for the problem with the country’s new rulers, the National Transitional Council (NTC).

Following months of heavy fighting against dictator Muammar Gaddafi, NTC fighters gained full control of Libya last month. Turkish construction companies that have the largest share of Turkish investments in Libya had to suspend projects following the national unrest.

Companies have failed to receive payment for projects — estimated at around $1.5 billion — they had completed prior to the uprising.

Economy Minister Zafer Çağlayan and a group of Turkish construction contractors met with Libya’s National Transitional Council (NTC) to discuss the future of payments of around $1.5 billion during a one-day visit on Monday. Observers said the visit had significant importance considering this is the first face-to-face interchange with the NTC on construction project payments following the council’s recent internationally recognized victory over Gaddafi forces. The minister met with Mustafa Abdul Jalil, head of the NTC on Wednesday in Tripoli. Speaking prior to the meeting, Abdul Jalil said they were grateful for Turkey’s support during the conflict and that Turkish companies will have a significant role in rebuilding the country’s civil war-torn towns. “Turkish companies will reconstruct buildings all across Libya, and some of these will be allocated to Libyan residents. This will be a great example of solidarity for future generations,” he explained. “Turkish companies had undertaken great projects in Libya, and they are famous for their quality work,” the NTC head added. Turkey has lent financial support as well as humanitarian assistance to victims of the Libyan conflict. Both Çağlayan and Abdu Jalil were expected to inform reporters about unpaid debts through the end of the day. The problems, however, may not come to an end as security is another issue that remains to be solved in the North African country.

Some Turkish contractors voiced concerns a possible authority gap in the post-Gaddafi Libya could endanger projects, currently underway at a total value of $15 billion. Turkish businesspeople are now hoping the government will also help secure the business rights they enjoyed during Gaddafi’s rule. But the issue that needs to be addressed first is the current unpaid debts. Evaluating the developments to Today’s Zaman on Wednesday, Association of Turkish Building Material Producers (İMSAD) Chairman Hüseyin Bilmaç said they attached utmost importance to healthy cooperation between Turkish advisors, industrialists and contractors in Libya. “This is crucial in maintaining our leadership in the Libyan construction market. … We are expecting the new government to address the safety concerns in the coming months,” he argued.

Speaking in Ankara on Wednesday, Union of Turkish Construction Industry Employers’ Union (İNTES) President Şükrü Koçoğlu said they “have to find an addressee with whom to discuss the future of Turkish projects in the country.”
source: todays zaman

Libya rush should start urgently, minister says

meb — Thu, 03 Nov 2011 09:07:41 +0000

Turkish construction companies should rush back to Libya, their one-time top market, as the government is ready to support them, according to Economy Minister Zafer Çağlayan.

“Our businessmen demand a special customs permit to take their machinery and equipment to Libya,” the minister said during a press meeting yesterday in Tripoli with his Libyan counterpart.

A business assembly of 200 people accompanied the minister during the one-day visit.

Turkish companies undertook $7.627 billion worth of projects in Libya in 2009 and 2010, according to official data.

Upon Turkish Prime Minister’s order, Turkey will build schools, mosques, police stations, courts and jails in Libya, the minister said.

Turkish contractors will start building these facilities for free once the Libyan authorities finalize determining their needs, he said.

The ministry runs a budget of $50 million to support consultancy practices for Turkish companies worldwide, Çağlayan said, adding that Turkey will pay up to $300,000 per project in Libya within the scope of this fund, calling it a gesture. “Libyan authorities will not pay for it.” he said.

Turkey will work on using this fund mostly in Libya.

Turkey has always been on Libya’s side and this is where the country diverges from other countries eyeing businesses there, according to Çağlayan.

“The countries that colonized Africa are today trying to achieve a role,” he said, without naming specific countries.

These countries are thinking of “how to exploit the resources there” once again, he added.

Abdullah Shamia, the economy minister of the National Transitional Council (NTC) in Tripoli, said Libya had a lot to learn from Turkey’s experiences. Turkey backed Libya during the transition period, Shamia said.

“We have overcome our cash problem due to Turkey’s support,” he said.

Turkey’s trade deficit widens to record highs

meb — Thu, 03 Nov 2011 09:05:17 +0000

Turkey’s trade deficit widened to a record level in September compared with last year, official figures published yesterday show.

Skyrocketing current trade deficit and a low domestic savings ratio in the growing economy raise concerns about the country’s dependency on import products and booming demand, according to professionals.

The trade deficit was $10.4 billion in September, the biggest gap recorded, compared with $6.7 billion on September last year and $8.2 billion the previous month, according to figures published by Turkey’s Statistical Institute (TÜİK). Measures taken by Turkey’s Central Bank have thus failed to reduce the trade gap in September, an economist told the Hürriyet Daily News.

Turkey might have already experienced the “peak” in its trade deficit by last month, and it might take a few months for the Central Bank’s steps to show their effect on the economy, Erol Katıcıoğlu, a professor at Istanbul Bilgi University, told the Daily News yesterday.

“Still, the Bank might be pushing the envelope regarding its moves between restrictive and expansionary monetary policies, he added.

More expensive imports

The Turkish Lira’s recent depreciation “might be seen as [a chance] to put the brake on booming consumption and imports in Turkey,” said Katırcıoğlu, adding that imports had not slowed down, although they have become more expensive, with the lira’s depreciation.

The trade gap grew faster than expected by markets, which estimated the deficit to be around $8.5 billion in September, mainly due to a considerable rise in imports, whichtotaled $21 billion in September – $2 billion higher than the markets’ expectation – thus marking an increase of 35 percent compared to the same month last year. Meanwhile, exports accrued in line with expectations at $10.8 billion. The gap for the first nine months of 2011 was $82 billion.

“It is obvious that the annual trade deficit will be way beyond expectations,” said Erdal Sağlam, an Istanbul-based economist.

Demand has not been reduced yet in line with expectations from the economy administration, he said, adding that low saving ratios in a country with strong demand could trigger further problems down the line.

“We expect to see an economic slowdown starting from November thanks to the Central Bank’s new policy that employs the interest rate corridor to increase overall interest rates in the economy,” he said in a statement emailed yesterday.

Domestic savings

Structural problems are still preventing Turkey from forging a sustainable economy, said Erdoğan Alkin, a Daily News columnist. The savings ratio problem still remains a key issue ahead of the country, mainly stemming from income injustice and a failing tax policy, he said. The ratio of domestic saving to gross domestic product in Turkey is currently at record-low levels and is expected to go down to 12 percent by yearend, compared to 12.6 pct it was in 2010.
source: hurriyet daily news