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April 13, 2018 www.intellinews.com I Page 4
“imminent,” the bank said in a note released on April 6.
The investment incentives announced by Erdogan will comprise of TRY137.4bn being awarded to projects by companies including Vestel, Tosyali, Metcap and Sasa, the economy ministry said. The incentive package includes exemptions from cus- toms tariffs and government support for employee insurance premiums.
Even a marginally better than expected set of latest current account deficit data on April 11 did little to restrain the record-breaking slide of the Turkish lira. Turkey’s central bank announced a
Russian stocks and bonds sell off heavily after new US sanctions imposed on oligarchs
evaporate in a day as a result of the selling.
Most of Russia’s blue chips were caught up in the slow-building maelstrom, which gathered momentum after the Easter holiday break, but companies belonging to metals magnate Oleg Deripaska were in the front line. Deripaska was singled out for special attention in the new Specially Designated Nationals And Blocked Persons List (SDN List). Eight out of the 15 companies listed are controlled by Deripaska.
Deripaska’s Hong Kong-listed Rusal warned inves- tors on April 9 that the company might be forced into default on its obligations as a result of the new US sanctions, causing the share price to halve.
The affect of the SDN list has been far more dra- matic than the controversial Kremlin List released
February current account deficit of $4.15bn, against a market expectation of from $4.2bn- $4.3bn. Nevertheless the deficit was up 62% y/y, bringing the cumulative deficit in the first two months of 2018 to $11.2bn, a significant 113% y/y deterioration. The 12-month cumulative deficit reached $53.35bn in February. It stood at $51.8bn in January and $34.1bn in February 2017.
The account’s huge gap makes Turkey reliant
on foreign investment flows. Moody’s Investors Service referred to concerns about the deficit when it cut Turkey’s sovereign debt rating further into junk territory last month, a move that drew Erdogan’s ire.
in January by the US Treasury Department, which was shrugged off by the market at the time as a “one size fits all” document copy-pasted from the last Russian Forbes rich list that included every- one worth more than $1bn.
Markets sell off
The ruble-denominated Moscow Exchange index sustained its heaviest losses since the annexation of Crimea, dropping by 8.3% in the day to close
at 2,090. Its sister index the dollar-denominated Russia Trading System (RTS) sold off even more, falling 11.4% in the day to close at 1,094 at the end of play on April 9.
Russian five-year credit-default swaps also climbed 15 basis points, while Russia’s 10-year ruble bonds fell for the second day in a row, lifting the yield 21 basis points to 7.285%, the highest since January, as trading volumes surged.
The ruble fell to a low last seen six months ago as the ruble traded above 60 to the dollar for the first time since November 2017 and briefly went over 75 to the euro. The falling value of the ruble came despite a surge in oil prices, which usually support the value of Russia’s national currency; Brent futures with a settlement date in June 2018 rose to $68.2 per barrel.