Category: Business

Turkey Adopts Legislation Raising Extent Of Land Foreigners Can Buy

(RTTNews) – The Turkish Parliament on Thursday passed a bill raising the limit from 2.5 to 30 hectares land that foreigners can buy in Turkey.

The new law, which was discussed and approved in the Parliament, amends title deed laws and changes the current reciprocity requirement, which dictates that citizens of 89 countries currently do not have the right to own property in Turkey because Turkish nationals are not entitled to own property in those countries. Among these countries are Russia, the Gulf States and the Turkic republics of Central Asia.

Under provisions of the new legislation, foreign buyers have to provide plans for the construction of a house on the land before they make the purchase. Foreign individuals and businesses will be required to submit their project proposals for the vacant lands to the Ministry of Environment & Urban Planning within two years. If the Ministry approves the project, it will be sent to the local land registry office, which will then monitor it.

Opposition parties put up a fierce resistance to the bill, criticizing the ruling Justice and Development Party (AK Party) for obeying orders coming from large businesses such as the construction sector. The final decision on the articles of the law will be made by the Cabinet, which will be able to determine which of the 89 countries will be added to the list of countries whose citizens are able to purchase property. The Cabinet will also be able to increase the 30-hectare limit on property purchase to 60 hectares as it deems acceptable.

Furthermore, the law allows for the purchase of up to ten percent of the total area of towns densely populated by foreigners. The Cabinet will be able to set limits and bans on the law depending on the country of origin and the number, type and qualifications of foreign businesses which have property in Turkey.

Only individuals and private businesses will be allowed to make land purchases, meaning entities such as public institutions, state-owned businesses and the like belonging to foreign countries will be barred from doing so, Turkish media reports said.

Planning Minister Erdogan Bayraktar defended the law, noting the importance of its contribution to the tourism sector and foreign investment. “The law will bring more investors, more tourists and more capital to the country,” he said.

by RTT Staff Writer

via Turkey Adopts Legislation Raising Extent Of Land Foreigners Can Buy.

May 5, 2012
US, Turkey to build 600 Blackhawks

Erdem Güneş erdem.gunes@hdn.com.tr

Turkey and the U.S. are seeking to sell some 500 “made in Turkey” Blackhawk helicopters to third countries, according to Francis J. Ricciardone, the U.S. ambassador to Ankara. “We will see over 600 Blackhawk helicopters, very high technology helicopters, produced here in Turkey. The great majority of these helicopters will go to third markets, third countries,” said Ricciardone during a Turkish-American business council lunch in Istanbul on May 4.

Around one hundred of these helicopters will be used by the Turkish Armed Forces, the ambassador confirmed. U.S. firm Sikorsky Aircraft won a $3.5 billion competition in April 2011 to lead the production of more than 100 large utility helicopters for Turkey over Italy’s AgustaWestland. The defense firm is mainly set to cooperate with local Alp Aviation in production. Along with Alp, Ricciardone said some other important firms would also contribute to the making of the utility helicopters.

Sikorsky also became the first major international company to formally announce it would also seek to win the light utility helicopter contest in May last year. However, no exact date had been decided for the production of Blackhawks, said an Alp Aviation spokesperson.

Possible buyers were also not clear yet, public relations representative Melek Akdoğan told the Hürriyet Daily News during a phone interview on May 4.

Riccardione also said that the U.S. supported Turkey’s ambitious 2023 target to become one of the world’s largest 10 economies.

“Yesterday I met with the representatives of Turkey’s Economy Ministry and we had talks with more than 70 firms,” he said during his speech.

“The ministry found a chance to show them all the opportunities in Turkey,” he said.

The envoy also said that Turkey and the U.S. should cooperate more in the fields of defense, technology, information and aerospace, adding that the dynamism in the Turkish economy could be seen by the newly built roads, airports, residences and malls across the country.

via BUSINESS – US, Turkey to build 600 Blackhawks.

May 5, 2012
S&P downgrades Turkey – time to exit?

Standard & Poor’s downgraded the sovereign credit rating of Turkey from positive to stable on Tuesday, indicating that the country is unlikely to receive either an upgrade or a downgrade within the next 12 months.

S&P cited subsiding external demand and deteriorating terms of trade as its primary reasons behind the downgrade.

The potential drop off in external demand stems from the poor economic health of its largest trading partner, the euro zone. A dearth of export demand could exacerbate headwinds facing the Turkish economy.

As well, because Turkey has minimal hydrocarbon reserves, the country has to import the majority of its fuel, which strains its balance of trade.

However, all is not doom and gloom in Turkey by any means. The country’s previously troubling current accounts deficit is improving. Central bank measures to cool the economy from overheating appear to be working , although inflation remains a concern.

The takeaway for investors is that Turkey remains a compelling growth story for investors looking for emerging market middle class growth; however, external pressures could handicap the Turkish economy in the short-term.

Long-term investors may wish to consider the iShares MSCI Turkey Index Fund ( TUR , quote ) on any major pullback.

Traders will see that TUR recently broke its 50-day moving average and may now test support at the convergence of the 100 and 200-day moving averages located between 48.25 and 48.50. A failure to hold at these levels could signal a further move down. As well, traders should look for fundamental weakness in oil prices as an opportunity to go long Turkey.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

via S&P downgrades Turkey – time to exit? – NASDAQ.com.

May 4, 2012
Long Distance Buses in Turkey

by Matt Gangemi

As BoltBus starts up 4x a day bus service between Seattle and Portland, building on QuickCoach‘s 7x a day service between Seattle and Vancouver BC, it might be a good time to look at a country with inter-city bus travel that really works. I’ve already looked at Istanbul’s wide array of travel options, now let’s consider the best way to get between cities in Turkey.

Ankara Bus Terminal, Tomek Türkiyede

Behold the Ankara bus terminal, in the capital of Turkey. There are dozens (hundreds?) of long-distance bus companies in Turkey, each one providing a similar service. Every city and town in the country has a bus terminal, with a similar configuration: buses outside of small storefronts of different bus companies, each advertising destinations, departure times, and prices. Walk past the storefronts until you find a good deal for your destination, walk in and buy a ticket, and board your bus.

Onboard, you can generally expect clean comfortable seats, the bus equivallent of a flight attendant, a bathroom, a moist towel to clean your hands, a lemon scented perfume or hand sanitizer (I could never quite figure this out), a cellophane-wrapped biscuit, a cup of Nescafe or tea, a restroom, and a low-budget Turkish movie playing on a TV screen. If the journey is long enough, your bus will stop at a large rest area with an inexpensive restaurant. The bus will likely be direct routed only between city bus stations, though it will in practice stop several times in a traffic lane of a major freeway and let people off, to climb over a fence toward their destination.

It’s not a huge mystery that Turkey has this massive long-distance bus network. Their trains are not fast or efficient, car ownership is comparatively low (9.8M passenger cars for 74.7M people, compared to our 238M for our 313M people), and they’re not rich enough to fly very often ($14.5k/person median per-capita GDP). The question is: can we replicate something like this here? As the price of fuel rises and driving rates drop, maybe BoltBus and QuickCoach are signs of the future.

(note: all numbers from Wikipedia)

via Long Distance Buses in Turkey – Seattle Transit Blog.

May 4, 2012
Turkey and the Raters: The Love Story Continues

By Joe Parkinson

It’s no secret that there’s little love lost between Turkey’s policy makers and ratings firms.

Turkish cabinet ministers and central-bank officials have long bemoaned raters’ stance on Europe’s fastest-growing economy, stressing that Turkey’s credit rating – which all three big firms rank below investment grade – is too low. Ankara has repeatedly fulminated against Fitch, Moody’s and Standard & Poor’s, hurling accusations of an anti-Turkish bias in their sovereign-ratings analysis. After Fitch lowered Turkey’s outlook in November, Economy Minister Zafer Caglayan said the company couldn’t be independent since it was 60% owned by French investors.

But relations appear to have hit a new low this week. On Tuesday, S&P cut Turkey’s outlook to stable from positive, saying risks to its creditworthiness have risen as a result of high debt and worsening terms of trade as demand for its exports weakens.

“Less-buoyant external demand and worsening terms of trade have, in our view, made economic rebalancing more difficult, and have increased the risks to Turkey’s creditworthiness given its high external debt and the state budget’s reliance on indirect tax revenues,” S&P said in a statement.

Many economists said the outlook change was partly spurred by growing fears over Turkey’s current-account deficit, which exceeds 10% of gross domestic product.

But Turkey’s cabinet reacted furiously, fanning out across the airwaves to decry the decision. On Thursday, Prime Minister Recep Tayyip Erdogan offered the latest salvo, accusing S&P of making an “ideological decision” and threatening to withdraw Turkey’s recognition of the agency as a legitimate credit institution.

“If necessary I will say, I do not recognize you as a credit institution,” Mr. Erdogan said in a speech in Istanbul. “Why are you reducing the credit note of a country which has been on the positive side for a while,” he added, in reference to S&P’s Wednesday upgrade of Greece’s credit rating to triple-C after Athens completed a major debt writedown with private creditors. S&P rates Turkey at double-B, two notches below investment grade.

The Prime Minister’s comments came just hours after Finance Minister Mehmet Simsek said the data S&P used to make its decision were outdated. Deputy Prime Minister Bulent Arinc said late Wednesday that S&P’s decision was “unfair and inappropriate,” adding that it was based on inaccurate data.

Turkish policy makers point to recent growth numbers — the economy expanded 8.5% last year; the second fastest expansion of any Group of 20 economy bar China — as evidence that Turkish fundamentals are good and the country’s rating should be higher.

Some economists agree. “I think many in the market would have a lot of sympathy for Erdogan and Turkey. The rating agencies have consistently got Turkey wrong, and it is two to three notches mis-rated by any fair assessment,” said Royal Bank of Scotland economist Tim Ash, a known skeptic of ratings companies’ views of Turkey’s creditworthiness. “It should be investment-grade already.”

Credit-default swap markets also suggest Turkey should have a higher rating; they have traded at levels that would imply a rating above investment grade for months, economists say.

Still, although some market players have argued that Turkish fundamentals warrant a higher credit rating, markets also have been repeatedly unnerved by the rapid expansion of the current-account deficit and concerns over the central bank’s unorthodox monetary policy. That external financing weakness makes Turkey vulnerable to a hard landing should the global economy hit another bump in the road, causing external financing to dry up.

Another concern over Turkey’s economy – inflation – was in focus on Thursday, as new data showed that prices rose at their fastest pace for three and a half years in April as energy and food costs jumped.

This time last year, many investors predicted that an election victory for Turkey’s governing AKP party and continued economic growth and budget consolidation could mean Turkey would be a member of the investment-grade club by now. Those boxes may have been ticked, but a credit-rating upgrade – and a potential thaw in relations between Turkey and the ratings agencies – still looks some way off.

via Turkey and the Raters: The Love Story Continues – Emerging Europe Real Time – WSJ.

May 4, 2012
Turkey attacks S&P for warning about outlook for economy

Turkey’s Prime Minister Recep Tayyip Erdogan addresses members of parliament from his ruling AK Party (AKP) during a meeting at the Turkish parliament in Ankara on April 24, 2012. (AFP PHOTO/ADEM ALTAN)

ISTANBUL, Turkey: Turkish Prime Minister Recep Tayyip Erdogan denounced Standard and Poor’s rating agency on Thursday, saying its downgrading of Turkey’s outlook was clouded by an “ideological approach.”

Erdogan told a televised meeting in Istanbul: “This is entirely an ideological approach. You cannot fool anybody, you cannot fool Tayyip Erdogan.”

He condemned the outlook revision as “very odd” and hit back at what he implied was discrimination by S&P, which had improved the outlook of crisis-hit neighbouring Greece, while lowering the perspective for Turkey.

The Turkish premier also threatened not to recognise the Standard and Poor’s as a credible ratings agency.

On Tuesday, Standard and Poor’s revised the outlook on Turkey’s long-term foreign and local currency sovereign credit ratings to stable, from positive.

On Wednesday, the agency lifted Greece out of selective default status in view of a bond swap which cancelled a big slice of Greek debt.

Explaining its view of Turkey, the agency said: “Less-buoyant external demand and worsening terms of trade (the price of exports compared to imports) have, in our view, made economic rebalancing more difficult, and have increased the risks to Turkey’s creditworthiness given its high external debt and the state budget’s reliance on indirect tax revenues.”

The agency said: “We have revised the outlook on Turkey’s long-term sovereign credit ratings to stable from positive, reflecting our view that the ratings are likely to remain at the current level during the next 12 months.”

Finance Minister Mehmet Simsek joined the government’s criticism and blasted the report as full of “very serious” mistakes.

“They should first do… correct analyses,” said Simsek, accusing Standard and Poor’s of having obsessions about Turkey and failing to appreciate the political stability in the country where the governing Justice and Development Party (AKP) headed by Erdogan is exercising its third term in power in a row.

Turkey’s economy grew by 8.5 percent in 2011 and by 5.2 percent in the final quarter, official data showed on Monday.

The Turkish government forecasts that growth of gross domestic product will slow to 4.0 percent in 2012 owing to the effects of the eurozone crisis, but is confident that the slowdown will be short-term.

However, analysts worry the country’s widening current account deficit is a sign the economy is overheating and is in for a sharper slowdown.

On Thursday, official data put inflation on a 12-month basis at 11.14 percent in April after holding steady at 10.43 percent for two months.

Turkey’s central bank forecasts inflation to slump to 5.0 percent in 2012.

via THE DAILY STAR :: Business :: Middle East :: Turkey attacks S&P for warning about outlook for economy.

May 4, 2012