Turkish Forum

Category: Business

  • Turkish Minister Retaliates Against WikiLeaks Claims

    Turkish Minister Retaliates Against WikiLeaks Claims

    By Joe Parkinson

    The WikiLeaks cables may have ensnared diplomats and heads of state across the globe, but in Turkey, the “revelations” have also hit the finance ministry.

    Associated Press Turkish Finance Minister Mehment Simsek, pictured last year.
    Associated Press Turkish Finance Minister Mehment Simsek, pictured last year.

    According to one of the documents obtained from the U.S. embassy in Ankara, Turkish Finance Minister Mehment Simsek urged investors to sell stock in Turkey’s largest media company, Dogan Yayin Holding AS, as it became locked in a tax battle with the government.

    The cable, dated Sept. 15, 2008, said: “There are suggestions of a deliberate political move against Dogan,” adding that the finance minister said the media group “won’t be around much longer.”

    On Friday, Simsek, a former Merrill Lynch banker with strong links to the international investor community gave his most vocal response to the allegations.

    He didn’t mince his words.

    “This is despicable — if they prove that I used such words, I will not stay another day in politics,” he told CNBC-e Turkish television, adding that “I wish there would be a possibility for a lawsuit, but unfortunately these low-lives are protected by Vienna agreement,” referring to the treaty that protects diplomats from prosecution.

    Dogan Yayin, which owns newspapers and TV stations accounting for more than 30% of Turkish audience share, has been locked in a dispute with Turkey’s Prime Minister Recep Tayyip Erdogan and the ruling Justice and Development Party, or AKP, over a series of tax fines totaling 4.8 billion lira ($3.39 billion), which is more than the value of the company.

    Dogan media outlets infuriated Mr. Erdogan in 2008 by writing a series of articles on alleged links between the AKP and a corruption case in Germany. Erdogan at the time called on Turks to boycott the group’s newspapers. In an interview with The Wall Street Journal last year, he likened the tax case against the group to that against 1930s U.S. gangster Al Capone, who was jailed for tax evasion. The government said the Dogan tax case is purely technical.

    The U.S. cable traces the rapid deterioration between the Dogan group and the government around the reporting by Dogan media of a court case in Germany, in which the group’s media and TV stations linked corruption at a charity to the ruling party in Turkey.

    Simsek had already rebutted the allegations in a statement Monday, where he labeled the content of the cable “baseless” and “fabricated.” He pointed to an error in the document, which incorrectly identified his 2008 post as “trade minister,” as evidence that its contents couldn’t be trusted. Simsek became a state minister for economic affairs in August 2007.

    But the nearly 8,000 documents leaked from the U.S. embassy in Ankara have captivated the public and dominated the news agenda here this week, pushing Mr. Erdogan on Wednesday to call on the U.S to punish diplomats who reported certain inflammatory claims, and threaten to take legal action against them.

    via Turkish Minister Retaliates Against WikiLeaks Claims – New Europe – WSJ.

  • Turkey Converging With BRICs on Cheapest to China Default Swaps

    Turkey Converging With BRICs on Cheapest to China Default Swaps

    By Jason Webb

    Dec. 3 (Bloomberg) — Turkey is converging with the BRIC nations in the credit market as the country’s economic rebound sends the cost of insuring debt against default to the lowest in at least a year compared with Brazil, Russia, India and China.

    The difference in the cost of five-year credit-default swaps on Turkey’s junk-rated bonds narrowed to 70 basis points above China yesterday, within 10 basis points of the all-time low reached on Nov. 4, and was the cheapest in 19 months compared with Brazil at a gap of 22 basis points last week, according to prices from CMA, a data provider. Moody’s Investors Service and Fitch Ratings lifted their outlook for Turkey to positive in the past two months.

    “Turkey and China are very different countries, but this decline in perceived risk is the result of a degree of outperformance” through the global credit crisis, Erkin Isik, an economist at Fortis Bank AS in Istanbul, said in a phone interview. Turkey “was hit by the crisis but less than others, and it’s emerging relatively better as a result,” he said.

    Investors are becoming more confident in Turkey as its economy grows at the second fastest pace in the Group of 20 major economies after China and record-low interest rates help spur local consumer demand. Prime Minister Recep Tayyip Erdogan, who has completed two stand-by loan agreements with the International Monetary Fund since his government came to office in 2002, broke off talks with the IMF in March as the country no longer needed a loan.

    Turkey swaps fell 21 basis points below Russia on Nov. 29, the lowest in a year, and are 37 lower than the State Bank of India, both of which have better credit ratings.

    Debt Reduction

    Turkey’s government plans to reduce public debt to 42.3 percent of gross domestic product this year, 40.6 percent next year and 38.8 percent in 2012, and bring the budget deficit down to 2.8 percent next year from 4 percent this year.

    Turkey’s GDP grew an annual 10.3 percent in the second quarter, matching China’s as the fastest expansion the period among G-20 economies.

    Moody’s raised its outlook to positive from stable on Turkey’s rating of Ba2, two steps below investment grade, citing improvements in the economy and the country’s debt management. Fitch Ratings lifted its ranking in December last year to BB+, one step short of investment grade, and switched the outlook to positive from stable last month.

    “The market has now priced in that Turkey will soon get upgraded to investment-grade status,” said Arko Sen, a debt and foreign-exchange strategist for emerging Europe, the Middle East and Africa at Bank of America Corp.’s Merrill Lynch in London. “We think that’s something that’s likely to happen as well, potentially towards the end of 2011.”

    China, Brazil

    China, with the fourth-highest investment-grade ranking of Aa3 by Moody’s and fifth-highest from Fitch at A+, released third-quarter GDP of 9.6 percent last month. Turkey will post third-quarter figures Dec. 10.

    Credit-default swaps on Turkey dropped to 139 basis points yesterday from 183 at the start of the year and as high as 849 in October 2008. The gap over Brazil was 29 basis points yesterday, down from 60 in January and 290 in October 2008, according to data compiled by Bloomberg.

    The contracts, which fall in price as perceptions of creditworthiness improve, pay the buyer face value in exchange for the underlying securities or the cash equivalent should the borrower fail to adhere to its debt agreements. A basis point is 0.01 percentage point.

    Debt Explosion

    Investment-grade ratings for Turkey would probably reduce the gap with Brazil swaps to zero, said Merrill’s Sen.

    “China and Brazil and Turkey are all in a bucket of countries where debt-to-GDP is the same or declining,” while in other places debt it’s “exploding,” Inan Demir, chief economist at Finansbank AS, said in a telephone interview.

    Turkey swaps fell to 19 basis points below Russia from 255 basis points higher in June 2006. Russia is ranked two levels above junk by Fitch and S&P at BBB and three steps higher by Moody’s at Baa1.

    The contracts for Turkey are 6 basis points from the lowest point in 19 months compared with the State Bank of India, which is rated Ba1 by Moody’s, the highest junk rating, and BBB- by S&P, its lowest investment-grade ranking. The difference is 6 basis points from the year high of 43 in August.

    “Good things are happening in terms of Turkish fundamentals, the strength of the banking system, the strong fiscal performance this year, the generalized investor comfort with Turkey, its high resilience to external jitters,” said Paul Biszko, emerging-market strategist at Royal Bank of Canada in Toronto.

    –With assistance from Steve Bryant in Ankara. Editors: Linda Shen, Gavin Serkin.

    To contact the reporter on this story: Jason Webb in London at jwebb25@bloomberg.net

    To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

    via Turkey Converging With BRICs on Cheapest to China Default Swaps – BusinessWeek.

  • Intl. Cooperation Platform bolsters Turkey regional ties

    Intl. Cooperation Platform bolsters Turkey regional ties

    Jody Sabral, Press TV, Istanbul

    Having the 16th largest economy world-wide, Turkey is a key regional economic power. Its rapid pace of growth and ability to with-stand the global economic crisis, says Turkey’s president, provides regional partners with know-how his country wants to share to aid regional development.

    A Turkish initiative, the International Cooperation Platform, brought together representatives from 26 countries including ministerial delegations from Pakistan and Iran to talk infrastructure and connectivity.

    Turkey’s foreign economic relations board showcased a project which aims to integrate the economies of Turkey, Syria, Lebanon and Jordan, not unlike the European Union model… Turkey’s hopes this will later be expanded to include other countries.

    Head of Foreign economic board. Turkey, Lebanon, Jordan and Syrian private sectors are cooperating and our aim is to share our experience.

    Turkey’s energy minister called for regional energy integration and cooperation to enhance the lives of ordinary people from Madrid to Gaza.

    Participants we spoke to agree and believe that strengthening relations in a regional setting can be a more effective to approach and solve regional problems.

    via PressTV – Intl. Cooperation Platform bolsters Turkey regional ties.

  • Economist of Armenian descent may be nominated for Nobel Prize

    Economist of Armenian descent may be nominated for Nobel Prize

    Daron Acemoglu, economist of the Armenian origin, may be nominated for Nobel Prize, Milliyet newspaper reported referring to Bloomberg.

    acemogluThe newspaper notes that Acemoglu will be the second Turkish citizen to get the Nobel Prize after writer Orhan Pamuk.

    In November Daron Acemoglu, Professor from the Massachusetts Institute of Technology, Istanbul citizen of the Armenian origin, was included in the second Top 100 Global Thinkers list issued by the Foreign Policy magazine.

    The Turkish press draws attention to the fact that two Turkish citizens, Foreign Minister Ahmet Davutoglu and Daron Acemoglu, are included in the list. According to the local media outlets, Davutoglu invited Acemoglu to Turkey. The professor said that he would be happy to strike up personal acquaintance with the Turkish FM.

    Daron Acemoglu was born in 1967 in Istanbul. In 1986 he graduated from the Galatasaray High School in Istanbul. He studied at the University of York in UK and later got his Ph.D. degree in London School of Economics.  In 2000 he was promoted to full professor at the Massachusetts Institute of Technology. According to the IDEAS/RePec economics and finance research center he is one of the 20 most quoted economists in the world.

  • SOCAR interested in Turkish gas distribution lines

    SOCAR interested in Turkish gas distribution lines

    The State Oil Company of Azerbaijan (SOCAR) is interested in purchasing gas distribution networks in Turkey.

    socarVagif Aliyev, head of SOCAR’s investment department and chairman of the board of directors of Turkey’s petrochemical giant Petkim, made the remarks to Hurriyet newspaper.

    He said SOCAR-Turcas was turning into a very strong energy holding: “We have very many projects, why not cooperate in the gas distribution sphere? I admit that today we are interested in such networks in Turkey as Bashkent Gaz and IGDAS (Istanbul’s gas distribution network).

    SOCAR is already involved in modernizing the gas distribution network in the Georgian town of Poti and has stated its interest in bidding for Georgia’s gas network as a whole, should it be privatized.

    Vagif Aliyev told Hurriyet that investments in Turkey were among SOCAR’s largest investments abroad.

    “We have made huge investments in the Petkim petrochemical complex and we do not want to stop at this, we have many plans. If a tender is declared for the purchase of the IGDAS gas distribution network, we want to take part in it,” he said.

    Vagif Aliyev dismissed as false comments in a US diplomatic cable published by WikiLeaks that Azerbaijan had sold gas to Russia to prevent Turkey becoming a gas distribution hub.

    “Azerbaijan has never said it does not want to see Turkey as an energy centre. Can a brother say this against his brother? We have always been happy about Turkey’s success and viewed it as our own,” Aliyev said.

    “As for our relations with Turkey, we have never concealed that Azerbaijan wants to sell its gas with a higher profit. Yes, we are brothers, but brotherhood and trade are different things. And we were glad to find a mutually acceptable solution,” Aliyev said.

    1news.az,  Hurriyet

  • Electronics giant opens plant in Turkey

    Electronics giant opens plant in Turkey

    ISTANBUL – Anatolia News Agency

    Foxconn says it will employ around 2,000 people at its Çorlu facility.

    Foxconn, a leading Taiwanese electronic components manufacturer, will start production in Turkey for U.S.-based HP, executives announced at a press meeting Thursday.

    Foxconn says it will employ around 2,000 people at its Çorlu facility.
    Foxconn says it will employ around 2,000 people at its Çorlu facility.

    With an investment of $60 million Foxconn will produce desktop computers for HP in Çorlu, in Turkey’s northwestern province of Tekirdag, in 2011, Director General of HP Turkey Serdar Urçar said Thursday.

    Foxconn has recently been shaken by a string of suicides at its Chinese factories, attracting bad press for the normally publicity-shy company.

    Urçar said HP had brought its global supply chain to Turkey and the factory in Çorlu would be a base for exporting desktop computers from Turkey to Eastern Europe, the Middle East and North Africa.

    Foxconn Turkey Director General Tuna Kardeş said the reason Turkey was chosen as the location for the investment was because Turkey has an experienced and qualified workforce.

    “We plan to start mass production in the second half of January,” Kardeş said.

    Kardeş said the company aimed to produce between 250,000 and 300,000 desktop computers for HP by the last quarter of 2011 and forecast a turnover of between $1 billion and $1.5 billion in 2012.

    HP computer sales in Turkey were up 18.5 percent year-on-year in 2009.  The company expects this rate to be around 6 percent or 7 percent by the end of 2010.

    Earlier this year the company announced it would employ 2,000 people at its Çorlu facility.

    The latest suicide – the 12th this year – marring the company occurred Aug. 4 when a 22-year-old woman jumped from her factory dormitory in the eastern Chinese province of Jiangsu. The group raised workers’ wages and installed safety nets on buildings to catch would-be suicides following the deaths.