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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: | ||
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| 1. Turkey's current account deficit narrows further |
| TEB |
| July 11, 2012 At USD 5.8bn, May's current account deficit was below the market consensus (USD 6.2bn) but closer to our forecast (USD 5.9bn) Consequently, 12-month cumulative current account deficit declined to USD 67bn in May from USD 69bn in April. Similarly, 12-month cumulative non-energy current deficit fell to USD 16.3bn from USD 18.5bn. The contribution of gold exports to Iran continued at a slower pace Net gold exports in May were USD 0.4bn, from USD 0.7bn in April. According to our calculations, seasonally adjusted current account deficit excluding gold and energy remained broadly flat in May. The main financing items were private sector's borrowing and deposit flows Private sector's short-term borrowing amounted USD 2.4bn, whereas medium- and long-term borrowing was USD 3bn, bringing medium- and long-term debt rollover ratio to 140%. In addition, net trade credits amounted USD 2.0bn. Non-residents' deposits in Turkey increased by USD 1.4bn whereas private sector withdrew USD 1.3bn of its deposits abroad. FDI was relatively strong at USD 1.3bn. As to portfolio flows, inflows to domestic bond market was USD 0.8bn whereas equity market has seen outflows amounting USD -0.4bn. Net errors and omissions were USD -1.4bn. We expect current account deficit at 7.4% of GDP this year The narrowing in the current account deficit has been strong so far. On a 12-month cumulative basis, non-energy current account deficit has shrunk significantly from its peak of USD 32.8bn in September 2011, to USD 16.3bn in May 2012. In addition, the recent decline in oil prices further favours the outlook of the current account deficit. Looking onward, we expect the 12-month cumulative current-account deficit to continue to narrow until Q4; however, the pace of adjustment is likely to slow in parallel to the pickup in economic activity and oil prices. |
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| 2. Cigna reportedly wins race for stake in Turkish insurer Finans Emeklilik |
| bne |
| July 12, 2012 US health care management company Cigna Corp has won the race for a majority stake in Finans Emeklilik, unnamed sources claimed on July 11, opening the way for the US company to tap into the attractive Turkish insurance market. Cigna has agreed terms to buy out a 51% stake in the insurance unit from Turkish lender Finansbank - which is in turn owned by National Bank of Greece. Finansbank currently holds 100% in the subsidiary, and the value of the deal has not been revealed. The agreement will see the US company form a joint venture with Finansbank, two sources familiar with the matter told Reuters. Insurance giants including France's Axa, Japan's Sompo, and Aegon of the Netherlands were reported earlier this year to be interested in the acquisition, which offers an opportunity to tap into Turkey's rapidly growing insurance market. "The winner is Cigna," one person said, adding that under the deal, the US company will have a 15-year distribution agreement with the joint venture. Finansbank announced in October that it had mandated the board to evaluate strategic options for a stake sale in the insurance unit. Meanwhile, sources claimed that Finans Emeklilik had already hired banks to manage the possible sale of some of its units. |
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| 3. Turkish e-trade market to grow 50% this year |
| Hurriyet Daily News |
| July 12, 2012 As the number of internet shoppers in Turkey increases rapidly, the proportion of online shopping will increase its 3-4 billion Turkish Liras share by over 50 percent this year, according to data from the Electronic Trade Managers Association (ET_D). Hakan Orhun, Chair of ET_D, told the Anatolia news agency that while in 2005 the average person would spend 76 liras on online shopping, in 2011 this number was 182 liras. "All the figures show that e-trade is growing by close to 50 percent each year. These figures also include telecommunication, airlines and insurance companies' statistics," said Orhun, who added that he believed online shopping could grow by as much as 100 percent this year. "Today the number of internet shoppers in Turkey is about 5 million or about 16 percent of total internet users ... Our first goal is to increase the number of online shoppers to the numbers of internet banking users," said Orhun, adding that the 10 percent increase in online shopping from December 2011 to January 2012 had really boosted their morale. According to Orhun, Turkey is one of the world's fastest growing e-trade markets. While the American and British e-trade markets grew by 16 and 17 percent, respectively in 2011, the Turkish market grew by 50 percent. He also noted that in the past while people who worked were more likely to engage in online shopping, the recent trend showed that housewives as well as retirees were also becoming avid online shoppers. |
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| 4. Russia's Lukoil to press for compensation on purchase of Turkish petrol stations |
| bne |
| July 12, 2012 Russia's largest privately-owned oil company, Lukoil, announced it has filed for arbitration over a 2008 purchase of a Turkish petrol station chain, arguing that changes to regulations following the acquisition mean it overpaid. "Lukoil's subsidiary in Turkey, Lukoil Eurasia Petrol, filed for arbitration in relation to the Akpet deal," Lukoil spokesman Dmitry Dolgov told Reuters. The newswire says that according to unnamed sources, Lukoil will argue that the regulatory changes made the $550m price it paid Turkey's Aytemiz excessive, sources told Reuters. Aytemiz declined to comment. The sources added that the Russian company has applied to Swiss arbitrators for compensation over the deal, which saw it buy 700 petrol stations licensed to Akpet. Since the purchase however, the Turkish Competition Board sharply reduced the length of contracts petrol stations sign with fuel distributors. "Because the Competition Board's decision altered the conditions, an application has been made at an arbitration court in Geneva," one of the sources said. "Compensation is being sought, naturally, but no sum of money is being discussed," he said. When Lukoil acquired the Akpet chain, Turkish petrol stations, which are independently owned and operated under franchise, had contracts lasting 15 to 25 years to sell fuel with a given distributor. A year after the acquisition, the Competition Board ruled the length of the contract violated anti-trust principles and limited the franchises to five years. The new regulation went into effect in 2010. Lukoil is now arguing that the value of the company it bought from Aytemiz has been sharply reduced by the new regulation. Another source confirmed that Lukoil had applied for arbitration earlier this year, adding that the Russian company's market share has remained roughly the same at 3.7%, despite the regulatory change. At the time of the purchase, Lukoil said it aimed to double its market share to 10% by 2018. |
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| 5. European banking recapitalisation exercise raises €95bn; no clean bill of health |
| Daiwa |
| July 11, 2012 The European Banking Authority (EBA) has today published an initial review of its recent recapitalisation exercise. This follows the passing of the end-June capital raising deadline. The EBA revealed that the process led to an aggregate €95bn capital increase across a group of 27 banks for which it had identified a combined shortfall of €76bn.* The banks have generally improved their capitalisation through measures with a direct impact on capital (i.e. increasing retained earnings, new equity and liability management), amounting to 76% of the recapitalisation amount, and, to a lesser extent, through measures impacting risk-weighted assets (i.e. disposal of assets and changes to internal risk measuring models). At the end of the day there was nothing particularly new or enlightening in the report as most shortfall banks had been updating the market on their progress in recent months. Improved capital buffers are a step in the right direction for bank creditors and the limited use of deleveraging and RWA trickery by the banks in boosting solvency gives important credibility to the process. That being said, the completion of the recapitalisation exercise in no way represents a clean bill of health for Europe's banks. Significant challenges remain, including the far-from-resolved euro area sovereign crisis, threatening economic contraction, and potentially debilitating regulatory change. Furthermore, there were a number of limitations to the EBA's recapitalisation exercise, not least the relatively limited scope of the exercise (i.e. only five Spanish banks included) and that it did not incorporate a macroeconomic stress test element. To be sure, the exercise only identified a capital shortfall of €1.3bn at BFA-Bankia compared to its recent request for a €19bn bailout! * Recall, in December 2011 the EBA exercise determined that from a sample of 71 large European banks, 37 banks had a collective capital shortfall of €115bn in meeting the requirement of a 9% core tier 1 ratio after accounting for an additional buffer against sovereign risk holdings. The deadline for completing recapitalisation measures was 30 June 2012. Note that the scope of today's overview report was somewhat limited, but understandably, as it excluded the six Greek banks and four other problematic banks (Bankia, Volksbanken, Dexia and WestLB) currently undergoing significant restructuring. These banks accounted for €39bn of the overall €115bn capital shortfall. |
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| 6. Global food price update |
| Renaissance Capital |
| July 12, 2012 The corn price rally in recent weeks shows this USDA forecast did not greatly surprise the market. Wheat stocks are still high enough to partly compensate for another poor corn harvest. This remains just a USDA forecast - we should have more certainty about food price trends once the harvest starts getting collected in the second half of July and August 2012. The implication is that food price declines in EM will stop after July 2012 data. We think the country to watch when August figures are released in September is China. If China sees CPI rising, it will be more reluctant to loosen policy (and it is already too reluctant, in our view). This is helpful for fertiliser stocks, as we have indicated for a couple of weeks now. |
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| 7. Turkey to get new IMF seat in 2014 |
| Hurriyet Daily News |
| July 12, 2012 Turkey will serve as the deputy executive director of its group of countries in the executive board of the International Monetary Fund (IMF) in 2012 before becoming an executive director in 2014, according to a statement from the Undersecretariat of theTreasury. The move comes as the monetary fund is undergoing a reform process designed to give a greater voice to developing countries on quotas and governance. The executive board of the IMF is composed of twenty-four directors, who are appointed or elected by member countries or by groups of countries. Countries with large economies have their own executive directors, while most countries are grouped into constituencies representing four or more countries. Currently Belgium represents Turkey at the executive board, along with Austria, Belarus, the Czech Republic, Hungary, Kosovo, Luxembourg, the Slovak Republic and Slovenia, according to the IMF's website. Belgium and Luxembourg have decided to join the group of countries of which the Netherlands is the executive director. After 2014, the executive directorship will be assumed by the members of groups alternately based on their voting powers within the fund. Turkey will re-assume the post between 2018 and 2020 and will act as deputy executive director during other periods |
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| 8. Turkey offers Syria to compare jet hit details |
| Hurriyet Daily News |
| July 11, 2012 Turkey calls on Syria to compare intelligence over the downed jet, inviting Damascus to provide any proof that the plane was shot down in Syrian airspace. The call comes after Gl's call on third countries to publicize any documents The Turkish government called on Damascus yesterday to compare intelligence on last month's downing of a Turkish fighter jet, inviting Syria to provide any proof showing that the plane was shot down in Syrian airspace. "Syria accepts that it downed a Turkish jet. ... [President Bashar al-Assad] has expressed sadness over this," Deputy Prime Minister Blent Arn told reporters in Ankara yesterday, referring to remarks in an interview daily Cumhuriyet conducted with al-Assad. "[He] says that it was hit in Syria's territorial waters or airspace. Our data show that these statements are not true. If [Syria] has information, documents or recordings of a third country, we are ready to compare [them with] our own information," Arn said. The Turkish government on several occasions has urged third countries to share any data concerning the state of affairs of the incident. Arn's call, however, was the first time a senior Turkish official has called on Syria to do the same. Most recently, President Abdullah Gl said July 9 that Turkey's allies needed to help shed light on how its jet was downed. The president also called on third countries to publicize any documents that they have regarding the incident, and said there was no bilateral issue, hostility or conflict of interest between Turkey and Syria. Erdo_an to meet Putin next week A few days after the incident, Syrian Foreign Ministry spokesman Jihad al-Makdissi said Syria had suggested the formation of a joint military technical committee to visit the site of the incident in Latakia in order to inspect what happened but added that the Turkish side did not respond to the offer. Meanwhile, Prime Minister Recep Tayyip Erdo_an will pay a one-day working visit to Russia on July 18, the prime ministry announced yesterday in a brief statement.There was no information concerning the agenda for the visit in the statement; however, officials from the prime minister's office told Hrriyet Daily News that Syria's attack on a Turkish jet would likely be the highlight of talks between Erdo_an and Russian President Vladimir Putin. The idea of a bilateral meeting was put forward by Putin when Erdo_an called him on June 27 to share information collected by the Turkish military and intelligence on how the June 22 attack, which led to deaths of two Turkish pilots, occurred, the same officials told Daily News. Ankara's announcement of the visit yesterday followed Moscow's announcement that it was refusing to make new arms sales to Syria. Russia also said yesterday it would be ready to host a new meeting of world powers aimed at ending the conflict in Syria, and proposed broadening the talks to include other countries, including Iran. International powers agreed in Geneva that a transitional government should be set up in Syria but left open the question of what role President Bashar al-Assad might play. |
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| 9. Polish coalition bickers over bailout to builders |
| Tim Gosling in Prague |
| July 12, 2012 Poland's governing coalition is struggling to find consensus between the senior Civic Platform and its Polish Peasants' Party (PSL) partner over the fate of the country's struggling construction companies, with ministers stating contrasting positions on the matter on July 11. With major builders PBG and Polimex-Mostostal in financial trouble, Economy Minister Waldemar Pawlak - who as head of PSL is also deputy prime minister - suggested after PBG applied for bankruptcy that the government could nationalise the pair or become their guarantor. He pushed that agenda again on July 11, telling the TVN CNBC broadcaster that state-owned development agency ARP could purchase new bond issues from the companies. He added that PBG would require around PLN500m (€120m) to regain liquidity, according to Reuters. To read the full story click here |
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| 10. Russia's tech tycoon |
| Ben Aris in St Petersburg |
| July 12, 2012 Anatoly Karachinsky has seen it all. A maths and computer whiz who was a product of the Soviet Cold War emphasis on pure science, he went into business as a young man in 1987 when Mikhail Gorbachev allowed the first private businesses to be set up during perestroika. He attended the famous "oligarch meeting," called by President Vladimir Putin shortly after the start of his first term in office where he laid down the law to the likes of Mikhail Khodorkovsky. And this is his seventh crisis. From its humble beginnings, Karachinsky's joint venture Intermicro (joint ventures were at first the only form of private enterprise allowed) eventually morphed into IBS Group in 1992, and is today one of Europe's leading software development and IT services providers, with over 10,000 employees in half a dozen countries and annual revenues of $650m. "I went into business at the end of the 1980s, but all I ever wanted to do was write programmes," says Karachinsky, who took time out during the annual Kremlin-sponsored St Petersburg Economic Forum to talk to bne. To read the full story click here |
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| 11. Istanbul water project refuels transformation row |
| Hurriyet Daily News |
| July 12, 2012 The connection of Istanbul's Golden Horn (Hali) to the Bosphorus via a four-kilometer long tunnel project has reignited a row over urban transformation between the municipality and residents around the Golden Horn. Fatih district Mayor Mustafa Demir said the Golden Horn would be suitable for swimming within five years with this project. However, locals from Balat on the southern side of the Golden Horn, have said they fear possible relocation due to the urban transformation project. "Locals have the right to have such fears, but 30 percent of buildings in that area are abandoned. They built their houses on the city walls, to such an extent that the city walls cannot even be seen from outside. We care intensely about the human factor in urban transformation projects," Demir told the Hrriyet Daily News yesterday in a phone interview. Demir repeatedly said their plan was not to remove people from their homes, but to provide a better environment. "Mutual understanding is crucial here. Those areas are not peaceful places. We want to transform their neighborhood into a peaceful area with their help." On the other hand, locals say the project was finished after an Istanbul court canceled an urban transformation project around the Golden Horn's Balat area. "We knew that this pipe project was finished before, but they kept it waiting until the Balat urban transformation project was brought to trial. When the court canceled their project, the aim to sell our possessions to rich people failed as well. Now they have revealed the project, as their advertising material renovating the Hali for the rich is in vain," Selahattin Gl, a Febayder (Fener Balat Ayvansaray) Association board member, told the Daily News yesterday. A transformation project in Istanbul's historical and predominantly Roma and Kurdish neighborhood of Balat was recently canceled by Istanbul's Fifth Administrative Court on the grounds of "harming the cultural pattern in the region." After a five-year struggle with the Fatih Municipality, the case was resolved in favor of the locals. The Istanbul Water and Sewage Administration's (_SK_) project, which was kicked off three years ago, ended on July 10 and the water channel was turned on. With this project, the seawater coming from Cendere will reach the Golden Horn through Ka_thane Creek, providing circulation for the Golden Horn which already hosts many water sports like rowing and sailing. The Golden Horn is also one of Turkey's few watercraft-landing areas. . The official opening of the tunnel is expected to be held soon, and Prime Minister Recep Tayyip Erdo_an is reportedly scheduled to attend the opening ceremony. |
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| 12. Religion at top of interests list of Turkey's population |
| Hurriyet Daily News |
| July 11, 2012 Turks are generally not interested in politics, unions, or associations, but they are interested in religious issues, a recent survey has shown. According to a survey conducted by the Turkish Statistical Institute (T_K), 65 percent of young Turkish people (aged 15-24) are interested in religious issues, while only 15 percent are interested in politics. The survey, "The Interests of Turkish Society in 2010 and 2011," also showed that adults (aged 25-64) were more interested in religion than politics too, with 64 percent saying they were interested in religion and only 18 percent saying they were interested in political issues. Unions and associational activities are the least interesting fields for youth, the survey revealed. Some 72 percent of young people said they were not interested in union and association activities. Fashion and politics became the second least interesting issue, with 46 percent. The least interesting issue for adults is fashion, according to survey. Some 70 percent of Turkish adults said they were not interested in fashion, with only 7.9 percent saying they were interested in fashion. The study also showed that Turkish people are not concerned about environmental problems. Only 19 percent of adults expressed an interest in environmental issues, while 28 percent of young participants expressed an interest in these issues.Both young and old are widely interested in health issues, the survey showed. |
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| 13. Turkey's 2050 population estimated at 94.6m |
| Hurriyet Daily News |
| July 11, 2012 Turkey's estimated population in 2050 will be around 94.6 million people, according to the Turkish Statistical Institute (T_K), Anatolia news agency has reported. The population of close to 100 million will put Turkey 19th out of 187 countries. The world population will increase at a speed of around 0.4 percent, according to T_K. Turkey is projected to grow at a pace of 0.2 percent, or 109th fastest in the world. |
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| 14. Business head backs workers over severance |
| Hurriyet Daily News |
| July 12, 2012 A possible change in Turkey's severance benefits system should guarantee the protection of vested rights, according to the head of the Turkish Industry and Business Association (TS_AD). If any change to the current system were to be planned, it could achieve a healthy result only if all parties contributed to the process, TS_AD chair mit Boyner said yesterday on her official Twitter account. "If the related draft reaches us we might comment in more detail," she said. "In this process the most sensitive issue is protecting those rights already acquired." The aim of all parties in changing the law should be to create jobs and cut unemployment, Boyner said. Workers will not be eligible to demand severance benefits until they have worked for 15 years, whether they are laid off or leave voluntarily, according to the new draft, some media reports said earlier this week. However, such a draft has not been officially disclosed yet. The only way to obtain severance pay prior to completing 15 years of employment will be to purchase a house, reports said. |
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| 15. Cosmetic giant eyes production in Turkey |
| Hurriyet Daily News |
| July 12, 2012 U.S.-based cosmetics giant Farouk Shami Group wants to make Turkey a production base for its cosmetic products, including hair-care products, electric products and spa treatments, according to Hrriyet. The group chairman, Farouk Shami, met with Turkey's Customs and Trade Minister Hayati Yazc last week in Istanbul. Shami told Hrriyet that Turkey was a second homeland for him and that he planned to expand his business to the Middle East and Russia, using Turkey as a base. "We want to invest in Turkey. Starting with Istanbul, we could invest in any corner of the country. That's why we will first look for a plot and then begin investing. We are also open to having local partners. I told Minister Yazc this and he was very positive," said Shami, adding that the head of Turkey's investment agency, _lker Ayc, had also offered his support. Shami said the cosmetics group would initially invest $150 million in Turkey, but are hoping to run a $1 billion business from Turkey in 10 years time employing 1,000 to 1,500 Turkish employees. The Shami Group produces more than 1,000 cosmetics products for export to 110 countries. Shami, the sponsor of the Miss Universe beauty pageant for 12 years, wants to bring the pageant to Turkey. |
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| 16. Daikin moves forward to make Turkey a hub |
| Hurriyet Daily News |
| July 12, 2012 Global Japanese air conditioning giant Daikin is gearing up to turn Turkey into its logistics and productions hub, according to a company press release. By purchasing Airfel, Daikin has made a significant investment in Turkey, and it will hold a press conference on Friday to disclose its investment plans. Meanwhile, Daikin hosted top level representatives from major Japanese companies like Toyota, Sony, IBM Japan, Sumitomo, Omron Corporation and Art Corporation in Turkey to discuss the future of the world economy, new investment strategies and goals for the coming period. "Turkey is not only important for Daikin, but because of its strategic location and connection to neighboring countries it has a key role. That's why we decided to host our consultative committee this year in Turkey," said Daikin Europe President Masatsugu Minaka. Daikin invested $260 million and began corporate operations in Turkey in 2011, according to the company press release. Minaka said holding the consultative committee in Turkey would act as an impetus for other Japanese firms who might want to invest in the country. The business leaders planted Japanese Sakura cherry trees in the garden of Daikin's Hendik plant to express their interest in the local market. |
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| 17. Turkey's electricity consumption hits new peak |
| Hurriyet Daily News |
| July 12, 2012 Turkey recorded its highest daily electricity consumption record since the inception of the Turkish Republic in 1923 on July 10, with 744.7 million kilowatts of electricity consumed, according to data released by the Energy and Natural Resources Ministry. In the first days of July daily electricity consumption averaged 725-730 kilowatts, but it hit 744 million on July 10. According to the ministry, electricity usage for agricultural irrigation in southeastern Anatolia, industrial production, and the current heat wave, which has spurred the use of air conditioning, are the reasons behind the record. Ministry officials also expect the level of use to continue increasing in the coming days, but stressed that there will be no disruptions in electricity. Turkey turned to neighboring Georgia and Bulgaria to help make up shortages of electricity on July 10. Electricity consumption in June was up 11.3 percent compared to the same month last year, reaching 20.4 billion kilowatts. In the first half of 2012, electricity consumption was also up 8.1 percent year-on-year, hitting 119.3 billion kilowatts. Energy trading hub Turkey is likely to overtake the U.K. as Europe's third-largest electricity consumer within a decade, and is seeking to become an energy trading hub, capitalizing on its booming population and economy as well as its proximity to cheap natural gas resources, according to Reuters. At 75 million and growing, Turkey's population is set to overtake Germany's, currently the EU's largest at 82 million, by 2025. Its economy has been booming for years, although the crisis in Europe has slowed its rate of growth. The government is keen to develop Turkey into the benchmark electricity market for trading in spot and derivatives contracts for southeastern Europe and much of Central Asia. "As a bridge between Asia and Europe, Turkey has the potential to develop a reference price for this region," said Turkish Energy Ministry Undersecretary Metin Kilci. Analysts say the liberalization of Turkey's power markets has made them attractive to foreign investors. "The Turkish electricity market has taken a lot of steps towards liberalization and reorganization," said Richard Sarsfield-Hall, a principal at the energy consultancy Poyry, who has advised energy companies on entering the Turkish market. A number of major utilities have begun eyeing Turkey for expansion. Turkey plans to finalize the privatization of electricity distribution by the end of this year, Energy Minister Taner Yldz said at an Ankara meeting yesterday. Addressing journalists at a meeting with electricity sector representatives, Yldz said the privatization board and the ministry are currently working on the issue. |
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| 18. Turkey's current account deficit narrows on revenues in services |
| Hurriyet Daily News |
| July 12, 2012 The current account deficit in Turkish economy dropped by 25.9 percent year-on-year to $5.8 billion in May, the Central Bank data shows. The improvement was supported mainly by services sector, economists say Turkey's current account deficit dropped by 25.9 percent year-on-year to $5.8 billion in May, according to the Central Bank's monthly report. The significant fall in the deficit, which was slightly above market expectations, was supported by an increase in services sector surplus. The main reasons behind the performance of the services sector were an increase in revenues from construction services and a slowdown in the pace of the tourism industry's downward trend, according to a Vakfbank report issued yesterday. Other positive factors in the closing of the gap were a drop in oil prices and the value of the Turkish Lira, and a slowdown in domestic demand which pulled down imports, according to the Economic Research Department at Vakfbank. According to the estimates of Vakfbank, the current account deficit sat at about 2.3 percent of the gross domestic product (GDP) in May, excluding energy imports. The overall deficit was at 8.8 percent in May, the bank's economists estimate. "Possible increases in the value of the Turkish Lira and oil prices may bring the slowdown in the current account deficit to an end," Vakfbank's report said. Oil prices - which hit $128 per barrel in March, the highest level seen this year - dropped to nearly $100 in May. The value of lira A faster than market expectation drop in the current account deficit will support the lira in the short term, Gizem ztok Altnsa, an economist at Garanti Yatrm, said yesterday. Market expectation for the current account deficit level for May was at least $6.1 billion. "Falling current account deficit figures show that the balancing process in the economy is continuing," said the Garanti Bank Economic Research Department in a report yesterday. The report said the fall was based on limited improvements seen in particular revenues and services, but cautioned: "Figures above expectations regarding the economic activity for the rest of the year and global economic growth due to European [financial woes] may slowdown the downward trend in the deficit. Our current deficit estimate for 2012 is at $64 billion with a forecast of an annual oil price average at $110 per barrel." The current account deficit dropped $9.9 billion to $27.1 billion in the first five months of 2012 compared to the same period last year. Between January and May 2012 foreign trade shrank $8.3 billion to $28.9 billion, the net income from services increased $879 million to $4.5 billion and the net expenditure dropped $750 million to $3.2 billion. Tourism revenues, a services item, decreased $341 million to $5.9 billion and tourism expenditure shrank $554 million to $1.5 billion in the first months of this year compared with the same period of 2011. The current account deficit has been on a downward trend for the last seven consecutive months, dropping to $66.9 billion annually in May, which is the lowest amount since October 2011 when the figure was $78.6 billion. Economy Minister Zafer a_layan said yesterday in a written statement that his year-end annual current account deficit expectation was about $65 billion or 8 percent of GDP. Direct international investments in the first five months of the year increased 10 percent, he said, adding that investment incentives would contribute to an improvement in the deficit in the upcoming period. |
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| 19. Isbank applies to Turkish regulator to issue up to TRY750m bond |
| bne |
| July 12, 2012 Isbank has started working on a short-term TRY500m ($275m) bond issue, and has applied to the Capital Markets Board, the Turkish lender said in a statement to the Istanbul Stock Exchange. The bond, which will have a maturity of 176 days, may be increased to TRY750m, depending on demand, the bank said, according to Reuters. |
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| 20. Turkcell Receives Another Award Worldwide for Excellence in its 2011 Annual Report |
| Press release |
| July 11, 2012 Turkcell, the leading communications and technology company in Turkey, has been honored by The League of American Communications Professionals LLC ("LACP") for its 2011 Annual Report. Turkcell is proud to have been granted awards from as distinctive an institution as LACP for the second consecutive year, this time for its 2011 Annual Report. LACP has awarded the highest ranking worldwide to Turkcell's annual report with the Platinum prize of the 2011 vision awards, in the category of Telecommunications, leaving behind global operators such as the China Telecom, Hutchinson Telecom, and SBA Communications. Turkcell received the Platinum award in the same category, last year. Earlier this year, Turkcell's 2010 Online Annual Report was recognized and awarded by the 2012 Investor Relations Global Rankings (IRGR) for having the Most Improved Online Annual Report in Europe. In evaluating the award, the Division Head of Turkcell's Investor and International Media Relations, Nihat Narin, commented that, "The awards that our Annual Report received are excellent reflections of Turkcell's valuable brand and excellence in communication. We are proud that such reputable institutions recognize how thoroughly and diligently Turkcell works in every aspect of its business, and it is an honor to have been awarded first place worldwide for two years in a row. We believe that Turkcell's dynamic and innovative approach will continue to show the world our devotion to transparency and communication." |
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| 21. Turkey's Albaraka - Adjusting TP for stock split |
| Renaissance Capital |
| July 11, 2012 Our total net income forecasts and fair value for the bank remain unchanged. We have adjusted our TP and EPS forecasts in accordance with the most recent stock split, which increased the number of shares from 539mn to 900mn. Our new TP is TRY1.07 (previously TRY1.8), derived using a dividend discount valuation methodology. Our EPS forecasts are TRY0.19 for both 2012E-2013E and TRY0.20 for 2014E (from respective TRY0.31, TRY0.32 and TRY0.34 previously). Our HOLD rating remains unchanged. |
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| 22. Turkey's Halkbank set to issue $500m in 5-year eurobonds for first non-junk issue |
| bne |
| July 11, 2012 The planned eurobond issue from Turkish state-owned Halkbank is expected to feature $500m of 5-year papers, unnamed bankers told Reuters on July 11. Initial price guidance is expected at around 5.375%. The issue will be the banks first non-junk status bonds and will look to lock in lowered borrowing costs after Moody's upgraded Turkey's government bond rating to Ba1 in June. Fitch Ratings said last week that it expected to assign the forthcoming debt issue by Turkey's largest listed state-run bank a rating of 'BB+(EXP)'. "The notes are senior unsecured and will rank equally with all of Halkbank's other senior unsecured obligations," the ratings agency said, pointing out that the final volume and terms could affect the rating. Halkbank is the seventh-largest bank in Turkey (ranking by total assets as at end-Q112). It controls a 10.1% share of banking sector deposits. Halkbank is a majority state-owned bank, with 75% of its shares held by the State Privatisation Fund. The remaining 25% of the shares are publicly traded. Halkbank's Issuer Default Ratings (IDR) are equalised with those of the Turkish sovereign. On July 5, one of the bookrunners - Bank of America Merrill Lynch, Citigroup, and Deutsche Bank - told Dow Jones that Halkbank had arranged a roadshow for the issue to run from July 9 - 11. |
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