Turkey’s Utaş Makine Sanayii has signed a deal with an American distributor in Hollywood for its UTS 15 rifle to be used in Hollywood action film productions, according to daily Zaman.
The UTS 15 rifle has already been used in the joint American-Canadian science fiction television show Fringe. Eight UTS 15 rifles will also be used in an upcoming film produced by Universal Pictures in Canada starring Tom Cruise and Denzel Washington. Another film to be shot in Thailand will also use the rifle. Utaş Chief Executive Officer (CEO) Abdullah Güzeldere said that although the film production team could not purchase a large quantity of rifles, the film still provided a good platform through which to showcase the weapon.
Utaş exports to 25 countries including America, Germany, England, Canada and Kuwait. It is also planning to start selling to Russia and Ukraine. “We sent our first shipment of rifles last week to the U.S. … We expect to sell 25,000 guns in the American market,” said Güzeldere, adding that they planned to sell to the Federal Bureau of Investigation (FBI) and the U.S. Police Department.
Economy Minister Zafer Çağlayan has announced that the Justice and Development Party (AK Party) government’s export target this year is to earn $149 billion in revenue from goods sold to overseas markets.
Speaking to the Anatolia news agency, the minister made comparisons between Turkey and other economies, particularly those in Europe, with respect to a number of key indicators such as gross domestic product (GDP) growth, the unemployment rate, the budget deficit and the ratio of public debt to GDP, concluding that 2011 was an excellent year for the country. In the field of exports, he noted that the government is optimistic about meeting the 2023 republic centennial’s target of $500 billion. To that end, he noted that this year’s target has been set at just below $150 billion. “Thanks to the strategies we will follow, we expect our volume of exports to top $149 billion and our imports to be at $248 billion by the end of this year,” he said.
Turkey’s main exports are motor vehicles, petrochemicals and textile products. It has a trade relationship with almost all nations around the world, but the country’s largest trading partner and export market is the European Union, with which it has a customs union. The 27-member bloc accounts for nearly 45 percent of all of Turkey’s trade overseas, down from over 50 percent a decade ago.
The volume of exports in 2011 will be announced by the Turkish Exporters Assembly (TİM) on Monday, but it will take another two months before the assembly’s annual import figures will be announced by the Turkish Statistics Institute (TurkStat).
According to the most recent data available, Turkey’s foreign trade deficit — the main reason for its wide current account deficit (CAD) — dropped by nearly 3 percent to $7.53 billion in November of last year from $7.75 billion in the same month of 2010. The same year-on-year evaluation by TurkStat indicated that the country’s exports expanded by 18.5 percent while its imports grew by only 8.8 percent in November. This is mainly due to the weakening of the lira against the US dollar for most of that particular month.
With the decline in the country’s foreign trade deficit expected to continue, it is also likely its CAD will shrink as well. Turkey’s CAD dropped to $4.2 billion in October of last year, nearly 35 percent lower than what it had been a month earlier.
The Turkish central administration’s revenues exceeded its expenditures by TL 2.14 billion ($1.14 billion) in the month of November, pushing its cumulative budget’s balance back to surplus with only a month left to go before year-end.
According an announcement from the Finance Ministry on Thursday, the Turkish budget produced a TL 439 million ($233 million) surplus in the first 11 months of the year. It had a deficit of TL 23.5 billion during the same period last year, and a TL 1.7 billion deficit in the first 10 months of this year. It also had a non-interest surplus, the figure calculated when all interest payments are assumed to be null, of TL 41.25 billion in the January-November period, marking an 80.3 percent year-on-year increase. This non-interest budget surplus figure was nearly three times higher than the government’s year-end target.
The strong budget performance this year came at a time when most European Union members, something which Turkey also aspires to become, are suffering from wide budget deficits. Turkey owes its budget achievements to the fiscal discipline it has adhered to, particularly in the past decade.
The same disciplined approach to government spending accompanied by successful privatizations and increased efforts to raise the state’s tax revenue also brought the public debt to gross domestic product (GDP) ratio lower in Turkey. It was 42.2 percent last year, compared to a 27-member EU average of 80.2 percent, and is expected to decline to 39.8 percent by the end of this year.
Government revenues were TL 272.76 billion, whereas its expenditures totaled TL 272.32 billion in the first 11 months of this year. It collected TL 234.1 billion in taxes from individuals and corporations in the January-November period of this year, 21.6 percent more than what it collected a year ago.
In remarks to the Anatolia news agency following the announcement, Minister of Finance Mehmet Şimşek said the budget will, however, have a deficit in the last month of the year because of an extra TL 10 billion the government is spending mainly on infrastructure, education and healthcare. “If this extra spending had not been done, we would have ended the year with a budget deficit significantly lower than our year-end target,” Şimşek said, adding that the year-end target, 1.7 percent of GDP, will nevertheless be easily met.
Turkey’s exports have reached $133.97 billion in the past 12 months, indicating that the country has now broken a new record with the highest level of exports in the history of the republic, Economy Minister Zafer Çağlayan said at a meeting in Ankara on Thursday.
Turkey sold $114 billion worth of goods to overseas markets last year. It witnessed a record in export volume in 2008 with $132 billion, but saw the same figure plunge below $100 billion the following year due to the 2009 global financial crisis. Observers argued this year’s exports data could mean a new record and that the latest figures are proof of this. The country aims to reach $500 billion in exports by 2023, the centennial of the foundation of the republic.
Speaking at a conference hosted by the Ankara Chamber of Commerce (ATO) in Ankara, Çağlayan said Turkey reached the highest level of exports in its history as of Thursday, adding that the country is poised to maintain this performance. “This is a success which many could not even dream of … but we are here to work harder, and even exceed these figures in exports,” he stressed.
Underlining that the government has intensified efforts to diversify export markets, Çağlayan said the government will increase the number of trade offices abroad to 250, currently at 109. The minister also said these offices will work to help attract more foreign direct investment (FDI) to Turkey than in the past. “Our trade representatives in Europe tell us that investors, particularly from the UK, Italy and France, are interested in new investments in Turkey,” he explained.
Making mention of improvements in attracting foreign investment in Turkey, the minister recalled that Turkey received $10.9 billion in FDI in the first nine months of this year, more than twice the amount for the same period a year ago. “One important fact was that 87 percent of international capital inflows to Turkey in the given period were from financially troubled EU countries. … Turkey maintained its appeal to European investors despite the ongoing crisis,” he said.
Çağlayan cited political stability in the country as the driving factor behind Turkey’s economic success and growth. Regarding the EU crisis, he said the government expected EU leaders to reach a healthy solution at today’s summit in Brussels before the troubled eurozone could maintain a speedy recovery. As regards an International Monetary Fund (IMF) estimate of a 2.5 percent growth rate for the Turkish economy in 2012, the minister said the government believes the IMF will revise this figure following positive developments in the economy.
With reference to ongoing political instability in Syria, Çağlayan called on the Syrian government to reconsider an earlier decision to suspend a free trade agreement with Turkey. “Syria is facing economic difficulties every month due to sanctions, particularly on oil,” Çağlayan said, adding that “it is not a wise move” for Syria to also place obstacles before Turkish trucks entering the country. “We are looking for new trade routes bypassing Damascus and negotiations are under way with Egypt, Lebanon and Iraq to this end. … We will launch a ro-ro service from the Port of Mersin to Beirut and Alexandria in a few days,” he added.
08 December 2011, Thursday / TODAY’S ZAMAN, ANKARA
The recent buyer of a Turkish brokerage, Renaissance Capital, is aiming for the top in all aspects of the Turkish capital markets. Speaking to the Daily News, the acting CEO for Turkey points toward economic ties between Turkey and Russia.
It remains to be seen whether Turkey, along with other fast-growing emerging economies, will be able to weather the spillover from the troubles in developing economies. Moscow-based investment bank Renaissance Capital, however, is betting that emerging markets will continue to offer solid returns for investors.
RenCap acquired Istanbul-based brokerage Mira Securities for an undisclosed sum last month.
According to Burak Akbulut, the company’s acting chief executive for Turkey, this is only the first step in gaining a solid foothold in Turkish capital markets.
“Renaissance Capital is very experienced in all emerging markets. It aims to be the leading investment bank in emerging markets,” Akbulut said in a phone interview with the Hürriyet Daily News. “We target to be active in all aspects of Turkish capital markets – brokerage, investment banking and initial public offerings. But initially, we’ll target trading and also will have a huge focus on research.”
RenCap, led by CEO Stephen Jennings, was established in 1995. Today, it ranks as the number-one researcher in Russia, South Africa and other markets, and has the same ambitious target for Turkey.
The company’s Istanbul office will be based at the old Mira Securities headquarters in the city’s Baltalimanı neighborhood. Akbulut said there was likely to be an initial staff of 15 individuals, including researchers.
A new trend
The acquisition comes at a time when Turkey’s trade and economic ties with Russia are flourishing, echoing rapidly developing relations between emerging markets, instead of the traditional focus on tying up with the West’s developed economies.
“Fund flows between the two countries are increasing. And RenCap is going to play a key role in these flows,” Akbulut told the Daily News. “And it’s not only about Russian firms that wish to invest in Turkey. Big Turkish companies have also been investing in Russia.”
Noting Turkey’s energy imports from Russia, Akbulut said he saw energy as a major sector in bilateral ties, especially once Russia officially becomes the 155th member of the World Trade Organization at the Dec. 15-17 summit of the international trade body.
Turkey obtains 40 percent of its oil imports and 64 percent of its natural gas imports from Russia, figures that make it highly dependent on the $1.9-trillion Russian economy. “RenCap will play a key role in bringing its expertise to Turkey regarding the energy sector,” Akbulut said.
The RenCap Turkey CEO said he hoped Russian banks’ interest in Turkey would continue. Russia’s Sberbank was named as one of the potential bidders for Denizbank, the Turkish unit of Franco-Belgian lender Dexia that had to be bailed out and is now in the process of breaking up.
RenCap may also use Turkey as a “gateway” to the Middle East and North Africa given Turkey’s key role in the ongoing Arab Spring, according to Akbulut.
Turkey’s exports decreased by more than $1 billion last month compared with October, according to recent data revealed by the Turkish Exporters’ Assembly. Still, the figure is nearly 14 percent higher than November 2010. The assembly’s data reflect a big hike in exports to African countries as Germany remains the top market
Turkey’s export trade slowed in November compared to the previous month despite a slight increase compared to the same month a year earlier, figures released yesterday show.
Exports fell to $10.7 billion last month from nearly $11.8 billion in October, according to data published by Turkey’s Exporters’ Assembly (TİM) during a press meeting in the northwestern province of Düzce.
However, the nation’s exports rose by 13.9 percent in November when compared to $9.45 billion in the same month last year.
According to official data, in the first 11 months of 2011, Turkey’s total exports rose by 19.7 percent to reach $122.1 billion. Turkey exported goods worth $133.9 billion with a 19.5 percent rise in the last 12 month period.
Germany, Iraq and the United Kingdom remained as the three leading markets for Turkish exports respectively, TİM’s data said.
The Turkish automotive industry generated the highest volume of exports last month with $1.6 billion, while the chemical industry ranked second with $1.2 billion. The third highest exporting industry was ready-to-wear with $1.1 billion.
The data also showed that the country made record exports to some African countries such as Ethiopia, which was up by 311 percent, South Africa by 229 percent, Angola by 206 percent, Nigeria by 199 percent, Ghana by 172 percent and Kenya by 142 percent.
Exports to Iraq in November were up 46 percent and to Russia by 26 percent.
November’s export figures indicate a step toward Turkey’s bid to reach a record $500 billion total export volume by the end of 2023, the 100th anniversary of modern Turkey, said Turkey’s Economy Minister Zafer Çağlayan while speaking at a press meeting in Ankara.
“The figures show that we are proceeding toward a new export record step by step,” he said. “This rise in exports at a point when global problems persist and there were some negative projection is really significant.”
He estimated Turkey’s total export volume would total $134.8 billion by the end of this year.
Turkey’s rating could be upgraded if the country pursued fiscal and monetary policies that reverse the recent growth in internal and external imbalances, Moody’s Investors Service said on Wednesday.
“Credit-positive pressure could also develop if the government consolidates its buffers, such as foreign-exchange reserves; these would improve the sovereign’s resilience to balance-of-payment shocks,” it said in its annual sovereign report on Turkey.
The positive outlook on Turkish government’s sovereign debt rating of Ba2 reflects the resilience of country’s economy during the global financial crisis, Moody’s said.
The strengthening of the government’s balance sheet in recent years has also improved its ability to withstand shocks, it said. The rating agency added that Turkey’s most significant challenge is the current account deficit and its financing.
01 December 2011, Thursday / TODAYSZAMAN.COM WITH REUTERS,
Turkey’s economy is set for a soft landing in 2012, continuing to grow, yet at a slower pace, HSBC chief economist Melis Metiner told Today’s Zaman on Tuesday. Speaking after an HSBC press breakfast, Metiner said she expected Turkey to experience a soft landing next year, with growth slowing “from a projected 7 percent in 2011, to 3 percent for 2012.”
Metiner cited the continuation of poor economic prospects in neighboring Europe as the reason for Turkey’s slower expansion next year. “We are predicting, together with our economists in London, that 2012 will be a tough year in Europe.
We are looking at a climate of stagnation in Europe, with near zero, or slightly negative growth across the region,” she said. However, she dismissed pessimistic predictions of a disorderly default on sovereign debt, or the possibility of a break-up of the euro. “There will be no exit from the euro, and no major credit event in the eurozone in 2012. Europe will have to go through a painful process of fiscal consolidation, eventually moving toward fiscal union,” she predicts.
The troubling outlook of Turkey’s biggest trading partner, the European Union, combined with a reliance on foreign funding to plug the country’s widening current account deficit (CAD), has led some analysts, such as Standard & Poor’s and Capital Economics, to believe that Turkey’s economy will experience a hard landing after stellar growth in 2011. HSBC has no such fears, according to Metiner.
Increasing financial instability in Europe has weighed on investor risk appetite in 2011. As investors look to historically safe assets to park their money, Turkey suffered a sell-off of Turkish equities in July and again in October and November, leaving the İstanbul Stock Exchange (İMKB) more than 25 percent off its May high, while the Turkish lira has experienced a slide against the dollar.
However, the compelling overarching story of Turkey’s economy, with a stable fiscal position and over 10 percent growth in the first half of 2011, driven by increasing domestic demand, has continued to attract the interest of long-term investors, with foreign direct investment (FDI) already surpassing 2010 levels, at $10.9 billion for the first three quarters of 2011.
Metiner said this positive trend will continue in 2012, with Turkey receiving “FDI of over $12 billion” next year. Moreover, the damper domestic demand in 2012 will ease growth in the rising CAD to a more manageable 6.6 percent of gross domestic product (GDP), according to Metiner.
Weakness within Europe — the source of nearly 90 percent of Turkey’s FDI in the first nine months this year — will prove a constraint, as funding difficulties and the process of sovereign and corporate deleveraging continues to take effect, preventing a return to the historic $22 billion of FDI Turkey attracted in 2007.
Yet Metiner expressed confidence that the same process of diversification that has occurred in Turkey’s international trade will be replicated with FDI. Signs of growing Middle Eastern investor interest in the country are already evident, with Saudi tour operators currently in the country, to explore investment opportunities in the tourism sector, while the Qatari group Retaj Marketing & Project Management announced plans last week for $500 million of investment in Turkey’s tourism industry.
HSBC prioritizes Turkey
HSBC Turkey head of strategy planning Evren Altıok, speaking with Today’s Zaman, reiterated HSBC Group CEO Stuart Gulliver’s comments that “Turkey is one of the fastest growing regions in the world.” The tougher financial climate since 2007 “has meant a retraction from markets and businesses in which we don’t have scale,” Altıok added. This refocus has turned HSBC’s attention to growing its retail and business banking operations in the country. HSBC plans to increase its retail customer base from “3.5 million to 5 million customers” by 2014, according to Altıok. He said HSBC will open 30 new branches from 2012, and increase its product offerings in business banking to attract the growing small to medium-sized enterprises (SME) that have spurred Turkey’s dynamic growth in recent years.
The favorable geographic position of Turkey, along with political stability experienced under the ruling Justice and Development Party’s (AK Party) over nine-year tenure, looks set to safeguard the country somewhat from economic headwinds in Europe. As a “leading global bank with particular knowledge in trade and a desire to grow our customer base,” Turkey is particularly attractive, said Toygun Özmen, HSBC Turkey’s head of trade and supply chain. The country was positioned to benefit from increasing global trade flows from emerging economies, with a strategic geopolitical position as a bridge between Asia and Europe, Özmen added.
29 November 2011, Tuesday / ERDUAN JAMES REID, İSTANBUL
Wireless equipment maker Nokia Siemens Networks will slash 17,000 jobs – almost one-quarter of its work force – in a move to cut annual costs by 1 billion euros ($1.35 billion) by 2013, company officials said yesterday.
The joint venture between Finland’s Nokia Corp. and Siemens AG of Germany said it would focus on mobile broadband networks and services as it slims down with a view to becoming an independent company.
Nokia Siemens has struggled to make a profit amid stiff competition in the global market for network infrastructure the technology and services needed to run mobile and fixed-line networks.
“As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation,” CEO Rajeev Suri said. Nokia Siemens in July dropped plans to sell part of its business to private equity firms and said it would take steps to improve its competitiveness as a standalone company.
Market watchers had speculated that Nokia would want to dispose of its ownership in the loss-making venture and focus on developing mobile phones in its new partnership with Microsoft Corp. Though Nokia is losing market share to rivals, including Samsung and Apple’s iPhone, it remains the world’s biggest mobile phone maker.
The network joint venture, by contrast, is falling behind its competitors, and has shown annual operating losses since it started operations in April 2007. Besides traditional competitors such as LM Ericsson of Sweden, Nokia Siemens is now facing strong challenges from Asian rivals such as China’s Huawei and ZTE Corp, said analyst Phil Kendall of Strategy Analytics.
“The Chinese have shaken up the operational environment by originally selling cheap hardware and won business that way, but have now built up a credible reputation and become quite competent technology providers,” Kendall said. “All of the big traditional Western infrastructure vendors have really had to work hard to fight off the threat.” Last year, Nokia Siemens acquired the majority of Motorola Corp.’s wireless operations for $1.2 billion in a major thrust to gain a stronger foothold worldwide and to gain access to top American wireless carriers and cable companies, including ATT, Verizon Wireless and Sprint Nextel Corp., which depend on technology provided by infrastructure suppliers.
The layoffs would cut Nokia Siemens’ 74,000-strong work force by 23 percent. Suri described the cuts as regrettable but necessary. He didn’t specify what kind of jobs would be slashed. “We will continue to push network outsourcing, we will not focus so much on field maintenance deals,” Suri said.
“That will allow us to use our global delivery capabilities and do remote management from our centers in India and Portugal and transform those businesses to pick up and make money.” Nokia shares jumped on the news, but closed down 2 percent at 4.09 euros ($5.48) on the Helsinki Stock Exchange. Based in Espoo, near Helsinki, Nokia Siemens has employees in 150 countries.