Page 6 - TURKRptJun21

The central bank officially has around $90bn of gross FX and gold reserves, but its net FX position remains in deep negative territory at around minus $60bn. The banking industry has an additional $20-30bn.
The flow of lira loans to the economy is also under close scrutiny. So far this year, it has not reached anything like the eye-popping levels seen in 2020, and local FX and gold demand does not seem to have taken off either.
Turkey’s banking watchdog BDDK is “planning to extend the regulatory forbearance measures” that allow the country's banks to record a loan as a non-performing loan (NPL) after a 180-day delay rather than a 90-day delay. The extension is expected to last to end-September or end-2021. NPL sales by Turkish banks declined sharply in 2020.
The government launched a fresh loan package for SMEs via the Credit Guarantee Fund (KGF). The annual interest rate on the loans will be 17.5%, with a grace period of six months. State-owned banks Ziraat, Vakifbank (VAKBN) and Halkbank (HALKB) and state-owned Islamic lenders Ziraat Katilim and Vakif Katilim, as well as private lenders Isbank, Garanti, Yapi Kredi, Akbank and Denizbank will take part in the loan scheme.
The Treasury is again cancelling 10-year domestic bond auctions.
Borsa Istanbul’s IPO price ceiling spell was broken. Morgan Stanley Capital International (MSCI) excluded Turkish Airlines (THYAO), Sabanci Holding (SAHOL) and Yapi Kredi Bank (YKBNK) from its MSCI Turkey index.
On the Borsa Istanbul and lira markets, there remains little liquidity, making Turkish assets vulnerable to shocks. Why the local stock market is not collapsing remains a mystery. The foreign investors are selling. And company owners are siphoning the market with initial public offerings (IPO) and rights issues. Yet outbreaks of turbulence on the Istanbul stock exchange are forestalled by an ‘invisible hand’ that keeps a grip on some of the stocks that make up the biggest weights in the benchmark indices.
Fuel price ceiling ended with huge price hikes.
Turkey’s e-commerce volume is expected to double in 2021.
Turkey’s Getir is “in talks for $500mn new funding to expand in the US.”
Turkey’s gaming start-ups remain a hot spot. Romanian games developer Firebyte opened Turkish unit ‘to capitalise on low development costs’.
Turkey completed tenders for 74 solar power plants with a combined installed capacity of 1,000 MW.
The flow of gas from Azerbaijan's offshore Shah Deniz I gas field to Turkey was halted since the 6.6bn m3/year (bcm/yr) contract signed in 2001 expired in April. The TANAP pipeline, which since 2018 has transited Azerbaijani gas from the Shah Deniz II field to Turkey under a separate contract for 6 bcm/yr, is operating normally.
Turkish private companies, including Gama Holding, Aksa, Kalyon and Demiroren are “holding talks with Russia’s Gazprom to renew contracts for 8bn cubic metres (bcm) of natural gas.” The contracts are set to expire at the end of 2021.
The steel industry is hot. BIM and A101 ranked 152nd and 244th in Deloitte’s Global Powers of Retailing 2021 list.
6 TURKEY Country Report June 2021 www.intellinews.com