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Mehmet SAMI Executive Board Member, Ata Invest, Istanbul

“Current Outlouok of Turkish Economy and Investment Environment” 11 th Joint Meeting of Turkey – Korean Business Council. Mehmet SAMI Executive Board Member, Ata Invest, Istanbul. FDI in Turkey - Contents. Turkey – Reminders Turkey – A country in transition

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Mehmet SAMI Executive Board Member, Ata Invest, Istanbul

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  1. “Current Outlouok of Turkish Economy and Investment Environment” 11th Joint Meeting of Turkey – Korean Business Council Mehmet SAMI Executive Board Member, Ata Invest, Istanbul

  2. FDI in Turkey - Contents • Turkey – Reminders • Turkey – A country in transition • Turkey – A new playing field • FDI into Turkey - Opportunities

  3. Turkey – Reminder : Growth Oriented Market • Growth Economy since 1923 • 1990s = Troubles begin – no 5 years of stability Average 5.2% Source: TURKSTAT and Central Bank of Turkey (also Dr DGökçe)

  4. Turkey – Reminder : Growth Oriented Market • Despite macroeconomic swings, Turkey is one of the world’s fastest growing countries. Since 1986, real GDP growth rate averages are around 4.3 % per year • GDP growth in Turkey is higher than that of OECD (average of 2.8%) in the last 20 years… Source: OECD

  5. Turkey – Reminder : Large Market • 2006 GDP growth = 6.1 % • Last 3 year GDPgrowth = 6.7 % • 18th largest economy in the world • 2nd largest economy in the Eurasian region • Largest economy in Eastern Europe Source: IMF

  6. Turkey – Reminder : Becoming More International Source: OECD, WTO * World figures are WTO Prospects

  7. Transition – Improved Macro Trends • Improved trends – Disinflation is successful Source: TURKSTAT and ATA Estimates

  8. Transition : Improved Macro Trends • Budget improvements evident Source: Ministry of Finance, TURKSTAT

  9. Transition – Manufacturing Improvements • Record Capacity Levels – Apr. 05 CUR = 81.9 % Source: TURKSTAT

  10. Transition – Earnings Growth Slide

  11. Transition – Concerns stills exist • Overvalued TL is causing concern, even locals are confused as for the future rates. Over Valuation Last 10 Year’s Average Under Valuation Source: Central Bank of Turkey

  12. Transition – Deficit Financing • Current Account deficit is heavily financed by portfolio inflows, the role of FDI is negligible until 2005 but expected to improve. USD mn USD mn Source: Central Bank of Turkey

  13. Transition – Deficit Financing - FDI Source: Central Bank of Turkey

  14. FDI into Turkey – Opportunities • Global FDI follows GDP growth with a lag 2006 E Source: Turkish Treasury, TURKSTAT, Central Banks of Hungary, Poland, Czech Republic, IMF

  15. Transition – Foreign Companies by Sectors • Foreign Companies are focusing on Turkey Source: Treasury, * as of June 2007

  16. Transition – FDI Flow – Interest in Deals during 2005 Privatizations Private Tender Turk Telekom Ereğli Steel Tupras Refinery Garanti Bank Belgacom Arcelor Shell GE Capital Etisalat Mittal Repsol ABN AMRO Saudi Oger Corus Eni SocGen SK Telecom Posco OMV Temasek Telecom Italia Severstal Indian Oil Deutsche Bank Telefonica NMLK Orlen HSBC TPI Azovstal NBG Metinvest Koç Holding Santander Koç Holding LebGok Zorlu Holding Doğan Holding Oskol Oyak Holding Oyak Holding Çalık Energy Multi Global Ereğli JV Petrol Ofisi Turtell Nurol – Limak JV Tupras Acquisition JV Mapa Zorlu Holding Anadolu JV Oyak Holding Enerji JV Koç Holding

  17. Transition – Manufacturing Hub ? • Strategic Location • Content Manufacturing (Interactive Digital Products Embedded s/w Capability) • Production Scale • Upto date automation with highly skilled labour force • Large and dynamic market • Integrated with global markets – Customs Union Since 1996

  18. FDI into Turkey - Opportunities

  19. FDI into Turkey – Opportunities – Specific • Deregulation : Energy & Telecoms • Privatization 2006 – 2007 : Energy & Financials • M&A Opportunities : Disposals & Consolidation • Mortgage Related Products • eInitiative – ICT Projects • Sector Focus; - Financial Services - Building Materials - Energy - ICT - Healthcare & Pharma - Real Estate & Property

  20. FDI into Turkey – Opportunities – Demographics • Moving forward, Demographics will matter Source: Worldbank (World Development Indicators 2004), Economist Intellegence Unit

  21. FDI into Turkey– Opportunities – Affluence • Size also matters, GDP relatively large Source: Worldbank (World Development Indicators 2004), Economist Intellegence Unit

  22. FDI into Turkey– Opportunities – Telecom Power • Communications demand, thus infrastructure showing strong growth Source: Worldbank (World Development Indicators 2004), Economist Intellegence Unit

  23. Turkey – Opportunities – Affluence • Fastest electricity consumption Source: Worldbank (World Development Indicators 2004), Economist Intellegence Unit

  24. Turkey – Needs Change.... • FDI needs change and growth numbers indicate change (past and future) Real GDP Growth, (Annual Avg., %) 2006-10 2011-20 2006-20 World4.03.3 3.5 EU 252.22.02.1 EU 152.02.02.0 Turkey4.94.14.4 Poland4.13.03.3 Hungary3.33.13.2 Russia4.72.63.3 BRIC5.74.04.6 Source EIU “Foresight 2020”

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