Page 14 - BNE_magazine_05_2020

14 I Companies & Markets
bne May 2020
Both Romania’s car factories to resume full operations in early May
Iulian Ernst in Bucharest
Romanian car producer Automobile Dacia, part of Renault group, plans to resume operations at its plant in Mioveni, near Pitesti, in two stages, on April 21 and May 4, the company’s management announced in
a press release on April 9. The Ford engine and car factory in southern Romania, at Craiova, will also resume operations on May 4, Ziarul Financiar daily reported as well.
Both factories suspended operations on March 19 to protect their employees from the coronavirus (COVID-19) pandemic.
Dacia will restart production at its mechanic and chassis plant on April 21 (the first Tuesday after Easter) with 250 employees who volunteer for this.
The presage department will also resume operations on the same day, with 190 employees. Then, on May 4, the Dacia car plant will resume full operations. The company has notified its employees that new rules have been established in the factory to avoid contamination with
the novel coronavirus.
blow to Garanti Bank, Akbank and Isbank as they are trying to rescue their invested money before Turk Telekom’s licence expires. The lenders took control of a stake in the company after the owner defaulted.
Meanwhile, the Turkish lira’s slide into territory not seen since Turkey’s 2018 summer currency crisis continued on April 16. The lira breached the 6.95-to-the-dollar threshold.
Turkish state lenders on April 15 sold $1-1.5bn to help prop up the lira, three unnamed traders told Bloomberg. But the decline still intensified.
State lenders are active on the USD/TRY market 24 hours
a day on all five trading days with traders ready to respond to any lira weakness – there’s news value when the sales of these banks exceed $1bn on a day when all emerging-market peer currencies fall apart and the lira nonsensically remains somewhat resilient.
The Turkish central bank’s gross FX reserves fell to $56bn as of April 10 from $58.2bn a week ago and $77bn at end-February, lagged official data from the national lender’s weekly bulletin showed on April 16.
Traders are the most bearish on the lira relative to the South African rand (ZAR) in 10 months, based on the cost of hedging against declines using put options, Bloomberg reported on April 16.
The rand has slumped 25% against the dollar this year compared with the lira’s 14% decline – but South Africa’s authorities don’t intervene in the currency market.
“TRY is the new ZAR”
Turkey may run out of ammunition to defend the lira, given dollar-debt redemptions in coming months that will weaken the currency, according to Luis Costa of Citigroup said in
a note to clients. “TRY is the new ZAR,” he added.
“I'm tempted to book profits up [in supermarket retailer] Migros (MGROS)] around [TRY]30. The weakening lira will affect their fx debt negatively, brick and mortar sales declines may only just be offset by the boom online and the PE holders who still have about 10% I think may decide to flip at any time once the lock-up expires,” Julian Rimmer of Investec said on April 16 in a note to investors.
“Stay short TRY,” he added.
“Turkish state lenders on April 15 sold $1-1.5bn to help prop up the lira”
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