Investment Opportunities in Turkey in the Framework of Recent Developments

Son Dönemdeki Gelişmeler Çerçevesinde Türkiye’de Yatırım Fırsatları

Türkiye has experienced a strong growth period after the crisis in 2001. However, in recent years, expectations about the Turkish economy have turned negative due to both global developments and local macroeconomic policy mistakes and political developments. These concerns have intensified in recent months, causing a significant depreciation of the TL and a rise in interest rates. In the upcoming period, inflation is expected to rise, the growth rate to decline, unemployment to increase and the foreign trade deficit to decline. However, as in every economic crisis, important opportunities arise in this period as well.

In Turkey, which has high private sector indebtedness, the number of companies in financial difficulties is increasing day by day. Important companies in many sectors such as energy, infrastructure and manufacturing, especially the housing sector, are doing debt restructuring. During this period, local banks also reduced their loan growth to zero in real terms. For these reasons, although the search for partners of companies with financial difficulties in Turkey has accelerated, they have difficulty in finding investors from the local market. This situation opens a serious window of opportunity for foreign investors.

There are investment alternatives such as direct partnership, acquisition, project-based partnership, project-based purchase, construction project with high profit potential and land investment for companies in financial difficulties. However, these investments carry very serious risks as well as enormous profit opportunities due to the economic course. In this context, it is essential to get consultancy with high local knowledge capacity in the selection of the company, sector and project to be invested in, in order to minimize the risks.

In addition to long-term investments, there are serious profit potentials in case of choosing the right companies with various risks in terms of short-term portfolio investments. The prices of stocks traded on the Istanbul stock exchange declined to very low levels in dollar terms. Banking sector stock prices are at book value. Manufacturing and export-oriented companies, on the other hand, show a more positive performance despite the general negative situation.

Although the Turkish economy is in a crisis situation in terms of macroeconomic balances, it has a serious profit potential in terms of long-term investment. It is an important economy with a population of 80 million with an average age of 30 and a diversified economic structure, production capacity, location and large domestic market. There are many investment incentive opportunities for investors. In this period, those who invest in the Turkish economy will be able to obtain high returns if they use local knowledge in the best way.

Av. Dr. Mehmet S. YURTÇİÇEK                                                                    Ramazan KÜÇÜK
Senior Consultant & Manager                                                                      Financial Services & Risk Management Specialist