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02.05.2008 - CNBC EUROPE
CNBC EUROPE Sabanci Holding Chairperson Guler Sabanci was a live broadcast guest of CNBC Europe
- SABANCI HOLDING CHAIRPERSON GULER SABANCI: "THE UNCERTAINITY IN TURKEY WILL BE CLEARED UP IN 5 TO 6 MONTHS"
- SABANCI: "DESPITE ALL THE DIFFICULTIES, THE FUNDAMENTALS OF THE TURKISH ECONOMY HAVE NOT CHANGED MUCH"
- SABANCI: "WE, AS THE SABANCI GROUP, HIT OUR TARGETS, AND CONTINUE WITH INVESTMENTS"
Sabanci Holding Chairperson Guler Sabanci was a live broadcast guest of Squawk Box Europe programme put on air by CNBC Europe, and answered Geoff Cutmore's questions. On the broadcast, Sabanci answered questions about the most recent happenings in the Turkish and world economy.
At the beginning of the interview, Anchorman Geoff Cutmore stated that Sabanci Holding was a multi-business group composed of numerous companies operating in 18 countries in various fields of activities ranging from energy to banking.
- Sabanci: "The uncertainty in Turkey will be cleared up in 5 to 6 months"
Making the introductory statement above, Guler Sabanci, responding to the question "How do you see the economy of Turkey from where you are?" said: "The uncertainty in the world is clear to everybody. And there is an additional uncertainty in Turkey due to a closure case against ruling Justice and Development Party (AKP). But we expect that this will be cleared out in five to six months. On the other hand, the Turkish government seems to have been doing the right things over the last few months. They already took steps for the completion of the arrangements with regard to the Social Security Act that the markets have been waiting on for so long. And then there is also Article 301, related to issues of freedom of speech, which is very important for Turkey and was an obstacle on the road to Europe. Once resolved, this keeps us on the road, as I say. We are expecting a new Turkish Commercial Code coming up. Also, the privatization seems to be starting."
- Sabanci: "Despite all the difficulties, the fundamentals of the Turkish economy have not changed much"
Answering the commentary, "Where should the investors make investment? There are doubts about the growth rate that was declared by the government to be 5-6%. The current account deficit is increasing. The inflation is rising. It seems that the economy is slowing down." Guler Sabanci stated as follows: "We, the Sabanci group, set our budget to match a lower growth rate compared to last year taking all those points of concern into consideration. It is definitely true that inflation will be higher. The Sabanci group expects around 10 percent inflation. As a natural consequence, the interest rates will be higher. And we expect growth to be less than 4 percent. The fundamentals of the Turkish economy, however, have not changed much."
Responding to a question about the effect of the current account deficit on the Turkish economy, Sabanci said: "Turkey has some temporary issues. Yet, the Central Bank made it public. We have to look at the issue of foreign direct investment. Over the last months, an additional $7 billion is already led inward. We expect to have a foreign direct investment level of $11-12 billion, even in a year like this. I don't mean to imply that there's no problem at all. Inflation is going up all around the world, commodity prices are soaring, and obviously, Turkey is an oil-importing country and is being affected by this fact. Interest rates are going up and growth is slower than last year. But the fundamentals of the economy did not change much. Once this overall condition has improved, I think Turkish economy can then bounce."
Bob Parker, Vice-chairman of Credit Swiss Asset Management, was another guest of the programme and commented that the Turkish economy had some issues, capital markets were relatively sensitive but that the economy was being effectively managed and there were Turkish companies successful in global business markets, as well.
Upon which commentary, Guler Sabanci stated as follows: "Surely, difficulties experienced by the Turkish economy in the past taught us the way of doing business in emerging markets. We, on our own behalf, have been running roaring business in two fields on the global market. Needless to say, you should first of all have the technology and brand-name that would lead you up to the global markets. And I agree with you on that Turkey has come up with good examples."
- Sabanci in figures…
Guler Sabanci was then addressed the question: "We know you enter into partnerships. What are your points of focus for the moment?", and responded as follows: "Based on the results for the first quarter, I can affirm that the Sabanci group hit its targets. A 20% growth was realized last year, and we expect it to be 12% for the current year. We move forwards in parallel with the targets we set. We put the main focus on expanding in two lines of business, namely energy and retailing. As far as energy is concerned, the government announced its privatization plan regarding distribution, and we are closely keeping at. We entered into thriving loan agreements for investments in energy while interest rates were still at satisfactory levels during the period through July to August. To conclude, we continue with investments."
- SABANCI: "DESPITE ALL THE DIFFICULTIES, THE FUNDAMENTALS OF THE TURKISH ECONOMY HAVE NOT CHANGED MUCH"
- SABANCI: "WE, AS THE SABANCI GROUP, HIT OUR TARGETS, AND CONTINUE WITH INVESTMENTS"
Sabanci Holding Chairperson Guler Sabanci was a live broadcast guest of Squawk Box Europe programme put on air by CNBC Europe, and answered Geoff Cutmore's questions. On the broadcast, Sabanci answered questions about the most recent happenings in the Turkish and world economy.
At the beginning of the interview, Anchorman Geoff Cutmore stated that Sabanci Holding was a multi-business group composed of numerous companies operating in 18 countries in various fields of activities ranging from energy to banking.
- Sabanci: "The uncertainty in Turkey will be cleared up in 5 to 6 months"
Making the introductory statement above, Guler Sabanci, responding to the question "How do you see the economy of Turkey from where you are?" said: "The uncertainty in the world is clear to everybody. And there is an additional uncertainty in Turkey due to a closure case against ruling Justice and Development Party (AKP). But we expect that this will be cleared out in five to six months. On the other hand, the Turkish government seems to have been doing the right things over the last few months. They already took steps for the completion of the arrangements with regard to the Social Security Act that the markets have been waiting on for so long. And then there is also Article 301, related to issues of freedom of speech, which is very important for Turkey and was an obstacle on the road to Europe. Once resolved, this keeps us on the road, as I say. We are expecting a new Turkish Commercial Code coming up. Also, the privatization seems to be starting."
- Sabanci: "Despite all the difficulties, the fundamentals of the Turkish economy have not changed much"
Answering the commentary, "Where should the investors make investment? There are doubts about the growth rate that was declared by the government to be 5-6%. The current account deficit is increasing. The inflation is rising. It seems that the economy is slowing down." Guler Sabanci stated as follows: "We, the Sabanci group, set our budget to match a lower growth rate compared to last year taking all those points of concern into consideration. It is definitely true that inflation will be higher. The Sabanci group expects around 10 percent inflation. As a natural consequence, the interest rates will be higher. And we expect growth to be less than 4 percent. The fundamentals of the Turkish economy, however, have not changed much."
Responding to a question about the effect of the current account deficit on the Turkish economy, Sabanci said: "Turkey has some temporary issues. Yet, the Central Bank made it public. We have to look at the issue of foreign direct investment. Over the last months, an additional $7 billion is already led inward. We expect to have a foreign direct investment level of $11-12 billion, even in a year like this. I don't mean to imply that there's no problem at all. Inflation is going up all around the world, commodity prices are soaring, and obviously, Turkey is an oil-importing country and is being affected by this fact. Interest rates are going up and growth is slower than last year. But the fundamentals of the economy did not change much. Once this overall condition has improved, I think Turkish economy can then bounce."
Bob Parker, Vice-chairman of Credit Swiss Asset Management, was another guest of the programme and commented that the Turkish economy had some issues, capital markets were relatively sensitive but that the economy was being effectively managed and there were Turkish companies successful in global business markets, as well.
Upon which commentary, Guler Sabanci stated as follows: "Surely, difficulties experienced by the Turkish economy in the past taught us the way of doing business in emerging markets. We, on our own behalf, have been running roaring business in two fields on the global market. Needless to say, you should first of all have the technology and brand-name that would lead you up to the global markets. And I agree with you on that Turkey has come up with good examples."
- Sabanci in figures…
Guler Sabanci was then addressed the question: "We know you enter into partnerships. What are your points of focus for the moment?", and responded as follows: "Based on the results for the first quarter, I can affirm that the Sabanci group hit its targets. A 20% growth was realized last year, and we expect it to be 12% for the current year. We move forwards in parallel with the targets we set. We put the main focus on expanding in two lines of business, namely energy and retailing. As far as energy is concerned, the government announced its privatization plan regarding distribution, and we are closely keeping at. We entered into thriving loan agreements for investments in energy while interest rates were still at satisfactory levels during the period through July to August. To conclude, we continue with investments."
