|
bne Turkey Daily ListExecutive Summary:
This is bne's Turkey daily newsletter, a list of the top stories in the country this morning. To manage your delivery options: click here: | ||
 |
|
|
|
| 1. In Cyprus, life's a gas |
| bne |
| May 17, 2012 Only a few short years ago, the prospect of finding commercial reserves of hydrocarbons in the eastern Mediterranean was, to use the inevitable pun, little short of a pipe dream. Offers of acreage were many, expressions of interest few. Now, if the results of the Republic of Cyprus' second licensing round that ended May 12 is anything to go by, that has certainly changed. Of the 12 blocks covering 45,000 square kilometres on offer, a total of 33 bids were received for nine blocks from 15 companies and consortia. Those bidding included some of the continent's biggest gas operators, Gazprom through its subsidiary GPB Global Resources, Italy's Eni in partnership with South Korea's Kogas, Italy's Edison, French giant Total and US independent Marathon not to mention several UK- and Israel-based independents. The level of interest is not difficult to fathom. Just to the east in the Israeli sector of the Mediterranean lies the Leviathan gasfield, holding an estimated 450bn cubic metres (cm) of gas and 600m barrels of oil, and the Tamar gasfield holding an estimated 275bn cm of gas. And drilling late last year by US company Noble Energy in Cyprus' own block 12 struck what was announced at the time as a substantial gasfield, which the company in May confirmed to hold 991bn cm of gas. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 2. Turkey's Ziraat Bank extends €100m credit line to Bosnia |
| bne |
| May 17, 2012 Turkey has agreed to provide a €100m credit line facility to support the development of the Bosnia and Herzegovina economy, through Turkish Ziraat Bank. The facility is being placed through Turkish Ziraat Bank Bosnia and Bosna Bank International, which will each receive €50m. A memorandum of understanding was signed by the CEOs of the three banks during the Sarajevo Business Forum on May 16. The funding will be used to fund investments into the agriculture and tourism sectors, to increase employment through SME and micro-lending. "Historically speaking, this geographic region has been a very successful area for cooperation in many areas, but it has not reached a high level in the trade sphere," Huseyin Aydin, CEO of Ziraat Bankasi, told delegates in Sarajevo. "We have a huge potential to develop trade, which we hope will be realised with the improvement of economic relations between our countries. Ziraat Bankasi is fully aware of the important role we can play here." The credit line is also intended to support the sustainable return of refugees and internally displaced persons. "It will contribute to helping displaced persons and refugees to go back to their original homes and find employment. By funding investments into agriculture and other sectors, the investment is not only helping displaced persons, but all people of BiH to raise their standard of living," said Damir Ljubic, BiH's Minister of Civil Rights and Refugees. |
| [Return to top of page] |
|
|
|
|
|
|
| 3. United States supports Turkey's goal to be among top economies |
| bne |
| May 17, 2012 Turkey aims to become one of top ten largest economies in the world. The United States believes that Turkey can achieve this goal, U.S. Ambassador to Turkey Francis Ricciardone said on Wednesday, reports the Anadolu Agency. Turkey, currently the 17th biggest economy, has taken great steps to improve its economy, said Ricciardone during a meeting with Governor Irfan Balkanlioglu of Afyonkarahisar Province. The United States supports Turkey and believes that the country will achieve its target of becoming one of the top ten economies, Ricciardone added. The United States wants to see Turkey as a strong country and economic locomotive of its region, Ricciardone said. However, Turkey would have to work hard to achieve its target, he added. Few issues that Turkey needs to work on are to draw more direct foreign investments, expand its financial and innovation system, and invest in infrastructure, Ricciardone said. According to the ambassador, Ankara and Washington had established a ministerial dialogue to increase trade and investments. Turkish-U.S. trade volume was $20bn in 2011. |
| [Return to top of page] |
|
|
|
|
|
|
| 4. Turkish Airlines to buy 50% of LOT |
| bne |
| May 17, 2012 Turkish Airlines plans to buy 50% stake in Poland's LOT Airlines, says Economy Minister Zafer Caglayan, according to the Anatolian News Agency. Turkish Airlines will acquire half of LOT Airlines. The two companies are still going over some technical negotiations, the minister said during a business meeting in Warsaw. He also expressed his hope that the negotiations would be fast. Turkish Airlines has been growing steadily. The company announced on Wednesday that it had signed an agreement with American JetBlue Airways to connect the carriers' networks at New York's John F. Kennedy International Airport and Washington D.C's Dulles International Airport. Thanks to the new agreement customers will be able to transfer between Turkish Airlines and JetBlue-operated flights in the two U.S. cities. Turkish Airlines has 150 international and 41 domestic destinations and operates in 187 airports in Europe, Asia, Africa and the Americas. On May 14, Turkish Airlines announced TL71m pre-tax profit in its the first quarter of 2012 tax financials. The company's January-April 2012 traffic data was promising. According to Renaissance Capital's EMEA Morning Monitor released on May 11, the airlines revenue passenger kilometres (RPK) increased by 25.5% YoY in April and available seat kilometres (ASK) went up by 15.5% YoY in the same month. Europe was the biggest contributor to Turkish Ailrines RPK and ASK growth in April, accounting for 29% and 37% of the total increases. "The results were strong, in our view. We like the solid Premier Class pax growth, passenger load factor (PLF) improvements and notable increase in utilization," the note reads. |
| [Return to top of page] |
|
|
|
|
|
|
| 5. CEE growth outlook subdued, most ratings stable at current levels |
| Fitch |
| May 17, 2012 Fitch Ratings says in a newly-published report that the growth outlook for the ten east-central European countries that joined the EU in 2004-07 (CEE-10) is likely to remain subdued over the next 18 months. External and domestic growth drivers are largely constrained in the short to medium term. This will make it challenging to achieve ambitious public deficit reduction objectives in 2012-13, despite commitments to fiscal consolidation. Nevertheless, the prevalence of Stable Outlooks embodies Fitch's view that, in most cases, existing sovereign ratings across CEE are well supported at their current levels. Fitch forecasts that CEE-10 average weighted GDP growth will slow to 1.6% in 2012 from 3.1% in 2011. The magnitude of the slowdown is expected to be similar to that of the eurozone, the region's main trade and investment partner. Fitch expects the global and regional economies to experience a far more moderate slowdown than in 2009. Thus, eight CEE-10 economies are projected to grow in 2012. Although it can be argued that pre-crisis output levels were unsustainable in some countries (namely the Baltics), economies across the region are operating below potential. Fitch's baseline forecast for the German economy implies that export growth will slow markedly across CEE this year and recover only partially in 2013. Despite signs that China intends to deepen investment and trade ties with the region, CEE countries are unlikely to reap significant short-term benefits from diversifying foreign trade towards Asia and other more dynamic regions of the global economy. Private and government consumption will be constrained by fiscal austerity, stubbornly high unemployment, debt overhangs (in some countries) and banks' reluctance to expand their asset sheets as their western European parents remain under regulatory pressure to enhance their capital ratios. The imperatives of fiscal austerity, mitigated by the increased absorption of EU funds, will limit public investment spending. Despite a partial recovery in sentiment, construction output was still contracting in annual terms across most CEE countries as of Q112, and is unlikely to recover in most countries in the short term. Fitch does not expect foreign direct investment (FDI) inflows to the region to recover to pre-crisis highs in 2012-13. However, a summary analysis of industrial capacity utilisation rates relative to trend and domestic savings-investment balances suggests that some countries may be able to fund domestically needed expansion of industrial infrastructure. Nevertheless, this potential should be judged against structural impediments such as public and external debt ratios, which are high in some countries. |
| [Return to top of page] |
|
|
|
|
|
|
| 6. Euro area annual inflation down to 2.6% |
| Eurostat |
| May 17, 2012 Euro area annual inflation was 2.6% in April 2012, down from 2.7% in March. A year earlier the rate was 2.8%. Monthly inflation was 0.5% in April 2012. EU annual inflation was 2.7% in April 2012, down from 2.9% in March. A year earlier the rate was 3.3%. Monthly inflation was 0.5% in April 2012. Inflation in the EU Member States In April 2012, the lowest annual rates were observed in Sweden (1.0%), Greece (1.5%), Ireland and Romania (both 1.9%), and the highest in Hungary (5.6%), Estonia (4.3%), the Czech Republic and Poland (both 4.0%). Compared with March 2012, annual inflation fell in sixteen Member States and rose in ten. The lowest 12-month averages4 up to April 2012 were registered in Sweden (1.2%), Ireland (1.5%) and Slovenia (2.2%), and the highest in Estonia (4.8%), Hungary (4.4%) and Slovakia (4.2%). Euro area The main components with the highest annual rates in April 2012 were alcohol & tobacco (4.7%), transport (4.3%) and housing (3.9%), while the lowest annual rates were observed for communications (-3.1%), education (0.7%) and recreation & culture (0.8%). Concerning the detailed sub-indices, fuels for transport (+0.34 percentage points), gas (+0.12), tobacco and electricity (+0.08 each) had the largest upward impacts on the headline rate, while telecommunications (-0.18), cars and rents (-0.07 each) had the biggest downward impacts. The main components with the highest monthly rates were clothing (2.3%), transport (0.8%) and hotels & restaurants (0.6%), while the lowest monthly rates were observed for communications (-0.7%), education (-0.2%) and food (0.0%). In particular, garments (+0.10 percentage points) and fuels for transport (+0.05) had the largest upward impacts, while telecommunications and vegetables (-0.04 each) had the biggest downward impacts. |
| [Return to top of page] |
|
|
|
|
|
|
| 7. Euro area external trade surplus 8.6bn euro |
| Eurostat |
| May 17, 2012 The first estimate for the euro area1 (EA17) trade in goods balance with the rest of the world in March 2012 gave a 8.6 bn euro surplus, compared with +1.0 bn in March 2011. The February 20122 balance was +2.3 bn, compared with -2.9 bn in February 2011. In March 2012 compared with February 2012, seasonally adjusted exports fell by 0.9% and imports by 1.1%. The first estimate for the March 2012 extra-EU271 trade balance was a 6.7 bn euro deficit, compared with -11.8 bn in March 2011. In February 20122 the balance was -12.0 bn, compared with -10.6 bn in February 2011. In March 2012 compared with February 2012, seasonally adjusted exports fell by 0.2% and imports by 0.9%. These data are released by Eurostat, the statistical office of the European Union. EU27 detailed results for January to February 2012 The EU27 deficit for energy increased (-70.3 bn euro in January-February 2012 compared with -61.6 bn in January-February 2011), as did the surplus for manufactured goods (+41.4 bn compared with +26.9 bn). EU27 exports to most of its major partners grew in January-February 2012 compared with January-February 2011, except for Turkey (-4%) and India (-1%), while exports to Norway remained stable. The most notable increases were recorded for exports to Switzerland (+29%), Russia (+22%) and Brazil (+20%). As regards EU27 imports, the largest increases were recorded for imports from Norway (+14%), USA and Russia (both +12%). Imports from Japan and Turkey fell (both -3%), while imports from India remained stable. The EU27 trade surplus increased with the USA (+12.0 bn euro in January-February 2012 compared with +11.2 bn in January-February 2011) and Switzerland (+7.9 bn compared with +3.3 bn), and remained almost unchanged with Turkey (+3.2 bn compared with +3.3 bn). The EU27 trade deficit fell with China (-26.5 bn compared with -28.0 bn) and Japan (-2.0 bn compared with -3.5 bn), but increased with Russia (-17.9 bn compared with -17.2 bn) and Norway (-10.6 bn compared with -8.4 bn). Concerning the total trade of Member States, the largest surplus was observed in Germany (+27.8 bn euro in January-February 2012), followed by the Netherlands (+7.2 bn) and Ireland (+6.8 bn). The United Kingdom (- 23.7 bn) registered the largest deficit, followed by France (-15.6 bn), Spain (-7.1 bn) and Italy (-5.5 bn). |
| [Return to top of page] |
|
|
|
|
|
|
| 8. IMF gives Latvia an upgrade and a nudge |
| bne |
| May 17, 2012 Following an upgrade to investment status by Standard & Poor's earlier in May, the International Monetary Fund (IMF) gave Latvia an "upgrade" of its own on May 16 when it more than doubled its GDP forecast for the Baltic state this year from 1.5% to 3.5%. Speaking in Riga alongside Finance Minister Andris Vilks, the IMF's Mark Griffiths - head honcho for the country ever since Latvia took a €7.5bn bailout in 2008 - said the figure could end up being even more substantial. "Short-term indicators suggest 2012 growth might end up slightly higher, provided the external environment does not deteriorate. Underlying inflation remains low and headline inflation should fall to around 2.6%," Griffiths said. The move sets the scene nicely for a planned June 5 IMF conference in Riga, at which Christine Lagarde will be centre stage to plug the message that austerity can indeed get results provided it is properly applied. Having seen its economy shrink by 18% in 2008 and a cumulative 25% during the crisis as a whole, Latvia posted strong growth of 5.5% last year and reported first-quarter growth of 6.8% on year on May 10. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 9. Quo vadis Croatian tourism? |
| bne |
| May 17, 2012 A recent television advertising campaign bills Croatia as "The new tourism star of the European Union." And blessed with a sun-drenched climate and stunning coastline, Croatia increasingly ranks among the go-to destinations for growing numbers of travellers from around the globe. But it's also fair to say that while tourism is a key revenue earner for Croatia, bringing in at least €6bn a year or the equivalent of 14% of GDP, the industry remains a plentiful source of controversy, with the future vision of tourism a hotly disputed topic among the local population. How the country best leverages its undisputed potential has become a matter of increasingly fierce discussion of late, as various factions within the country contest how best to attract free-spending tourists without destroying the country's deeply-cherished natural and cultural heritage. For example, the island of Pag located in the south of the country off its Dalmatian coast, whose Zrce beach parties and festivals near the town of Novalja have earned it the moniker of the "New Ibiza", was recently the scene of a conference which debated the pros and cons of the annual invasion of hordes of nightclubbers from around the globe. While events such as the Hideout Festival have attracted widespread critical acclaim abroad, with UK daily The Guardian naming it among the best of the European festivals in 2011, there's been a growing groundswell of domestic opinion on the island that sees such events as a curse rather than a blessing. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 10. AKP deputy provincial head murdered in SE Turkey |
| Hurriyet Daily News |
| May 17, 2012 Turkey's ruling Justice and Development Party's (AKP) deputy provincial head for the southeastern province of Sirnak was murdered last night in front of his house, daily Hurriyet reported. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 11. Greek radio back in Istanbul |
| Hurriyet Daily News |
| May 17, 2012 The Rum (Anatolian Greek) community of Istanbul launched its first radio station in half a century two weeks ago over the internet with surprising success. "Iho Tis Polis" (Voice of the City) began broadcasting at the website http://radio.ihotispolis.com, because financial constraints have forced the producers to turn to the internet rather than purchasing a radio frequency. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 12. Hundreds protest anti-evolution meet in Turkey |
| Hurriyet Daily News |
| May 17, 2012 Hundreds of protesters gathered in front of Istanbul's Marmara University's campus yesterday to speak out against Turkey's "first-ever academic creationism symposium" that was organized by a student club, backed by the university's administration, and attended by about 50 people. "It is a new step taken against science, this is called the Islamization of the universities," said Professor Atilla Senel, a prominent anthropologist who was among the protestors. Police prevented Senel was from entering the two-day symposium titled "Why does science deny inter-species evolution?", by request of Marmara University's rector. "This is a part of the program aiming to raise a religious generation.' Those academics who give presentations in that room have nothing to do with science. They can preach in a mosque but not in a university," he told the Hurriyet Daily News. "If the symposium's organizers wanted to engage in a scientific debate, they would allow those with opposing ideas to be in the room." Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 13. Turkish PM challenges opposition on Kurdish issue |
| Hurriyet Daily News |
| May 17, 2012 Prime Minister Recep Tayyip Erdogan challenged the Republican People's Party (CHP) today to detail its proposals for resolving the Kurdish conflict and explain what it means by "social consensus." Addressing CHP leader Kemal Kilicdaroglu, Erdogan said: "He keeps saying that the anti-terror struggle should be carried out with a social consensus. What is a social consensus? Come on, go ahead. Tell us what a social consensus means, no one is gagging your mouth." Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 14. US gave intel for Uludere raid: Report |
| Hurriyet Daily News |
| May 17, 2012 The botched air raid by the Turkish military that killed 34 civilians last December was conducted based on intelligence received from an unmanned U.S. aerial vehicle, the Wall Street Journal (WSJ) reported yesterday. U.S. authorities notified their Turkish counterparts after one of their own drones "spotted the men and pack animals," according to the report. The location, known as a route frequented by Kurdistan Workers' Party (PKK) militants, prompted U.S. officials to pass on the information. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 15. Visa agreement for Turkey not far away |
| Hurriyet Daily News |
| May 17, 2012 A comprehensive visa facilitation agreement between Turkey and the European Union is not far away, the vice president of the European Commission said after talks with Turkish ministers in Ankara yesterday. The countries who agree to visa-free travel must be able to handle all possible flows of people. This is the key issue and must be discussed in detail. But I understand the process is ongoing and there are several developments also to give visa facilitation to business people and drivers. We move by small steps, but I think a big agreement is not very far away, Siim Kallas, who is also the EU commissioner responsible for transport, told reporters yesterday. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 16. Law on urban transformation approved by Turkish Parliament |
| Erste |
| May 17, 2012 The law regarding urban transformation projects in major cities (related to earthquake risk) was approved by parliamentary vote yesterday and thus the government has completed the trio; the awaited pieces of legislation for the real estate sector. The 2B law and the law on real estate sales to foreigners were approved by the Parliament within the last month. Approx. 55% of the 19.5mn residential units in Turkey are in recognized earthquake zones and more than 65% of these lack construction permits. Meanwhile, 60% of Turkey's residential stock is over 20 years old. Environment and Urbanization Minister Erdogan Bayraktar previously stated that Istanbul, Izmir, Bursa, Eskisehir, Kocaeli, Bingol, Van and Diyarbakir would be the priority provinces for urban transformation. According to the minister, the total volume of planned urban transformation projects is about USD 200bn. We argue that sales of 2B land and urban transformation would increase land supply, and hence the development of new projects, while the easing of real estate property sales to foreigners would increase demand in Turkey. These issues are potential triggers for real estate developers, especially residential ones; Emlak Konut REIT and Sinpas REIT. TOKI will play a key role in urban transformation projects, and we expect Emlak Konut REIT to be a main beneficiary of this, as 75% of the company's shares are held by TOKI, from whom it is able to acquire land without tender. Emlak Konut REIT aims to play an active role in urban transformation projects in major cities, especially Istanbul and Ankara. Sinpas REIT is also interested in urban transformation via its fully-owned subsidiary Eviya Real Estate, which focuses on projects geared to the middle-income segment, and currently already has an ongoing project (Egeboyu) and is seeking new land for further project development. |
| [Return to top of page] |
|
|
|
|
|
|
| 17. Rapid growth attracts int'l industry giants to Turkey |
| Hurriyet Daily News |
| May 17, 2012 The world's largest multinational companies have started to announce new investment plans in Turkey, a fruit of the sweeping incentive scheme announced by the government to attack the current account deficit by luring external investments. Potential investment opportunities reinforced with the scheme come as European economic and financial woes seem far from ending. General Electric (GE), an American conglomerate, appears to be one of the first companies to make investment plans designed to take advantage of strategic investment incentives. The company has held two rounds of official talks on possible investments in Turkey with Industry Minister Nihat Ergun, daily Hurriyet reported yesterday. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 18. Turkey needs strong ties with neighbors |
| Hurriyet Daily News |
| May 17, 2012 The quality and standards of democracy should be improved, the newly elected chairman of the Independent Industrialists and Businessmen's Association (MUSIAD), Nail Olpak, said yesterday at a press conference, according to a press release by the association. Click to read more |
| [Return to top of page] |
|
|
|
|
|
|
| 19. Acquisition of 38% of Turkish TAV Havalimanlar Holding A.S. completed |
| Erste |
| May 17, 2012 Acquisition process of 38% of TAV Havalimanlar Holding A.S. is completed Akfen Holding announced that, Ae?roports de Paris Group has completed the acquisition process of 38% of TAV Havalimanlar Holding A.S. ("TAV Airports, TAVHL TI") and 49% of TAV Yatrm Holding A.S. ("TAV Investment", owner of TAV Construction, an unlisted company) on 16 May 2012 |
| [Return to top of page] |
|
|
|
|
|
|
| 20. Turkish Koza Gold posted TRY 190.4mn net profit in its 1Q12 financials |
| Erste |
| May 17, 2012 Koza Gold posted TRY 190.4mn net profit in its 1Q12 financials, better than the consensus of TRY 157mn. The company posted TRY 83.1mn net profit in 1Q11 and TRY 166.8mn in 4Q11. In general, it seems that the 1Q12 results reflect higher revenues, driven by increased gold and silver sales. The company's gold and silver production was realized at 98 koz and 41 koz, respectively. Koza Gold sold 99 koz of gold (40koz from the Ovack Process Plant, 35koz from the Mastra Process Plant and 24koz from the Kaymaz Process Plant) and 30koz of silver. Revenues came in at TRY 303.6mn, up 116.8% y/y. At the operating level, the company generated EBITDA of TRY 245mn, up 141.8% y/y. The average gold selling price also increased to USD 1,692.33/ounce in 1Q12. |
| [Return to top of page] |
|
|
|
|
|
|
| 21. Teknosa shares will start trading on Istanbul Stock Exchange today |
| Erste |
| May 17, 2012 12.65mn of shares of the company (11.5% free float) were offered to the public on May 9-11. The IPO price for Teknosa has been announced as TRY 7.75 per share, which is closer to the top edge of the price interval of TRY 7.00-8.25 set during book-building. The market capitalization for Teknosa is thus TRY 852.5mn. |
| [Return to top of page] |
|
|
|
|
|
|
| 22. Turkish CIMSA: Lower than expected 1Q12 net profit |
| Erste |
| May 17, 2012 Cimsa reported TRY 7.2mn net profit for 1Q12, lower than our expectation of TRY 10.2mn and the consensus estimate of TRY 11.7mn. Total revenues declined 11% y/y to TRY 132mn in 1Q12 (our expectation: TRY 141mn, consensus: TRY 134mn). The company's EBITDA was TRY 24.3mn in 1Q12, also below expectations (our expectation: TRY 30.4mn, consensus: TRY 27.3mn), while the EBITDA margin declined 4pp y/y to 18.4% in 1Q12 (our expectation: 21.5%, consensus: 20.3%). |
| [Return to top of page] |
|
|
|
|
|
|
| 23. Turkish Aselsan posted TRY 88mn net profit in its 1Q12 financials |
| Erste |
| May 17, 2012 Revenues came in at TRY 386mn, up 29% y/y and down 34% q/q. At the operating level, EBITDA was realized at TRY 65mn, down 5% y/y, indicating a 17% EBITDA margin (down 6pp y/y, up 10pp q/q). Below the operating line, the company recorded TRY 37mn net financial income, supporting the bottom line. In general, there was deterioration in the operating margins in 1Q12, at which the tax financials had already hinted. |
| [Return to top of page] |
|
|