Investment projects at a total value of $24bn are being processed by Turkey’s Investment Support and Promotion Agency (ISPAT), the head of the agency Arda Ermut said on August 12. The high number of recent projects, over 150, is a testament to investors’ commitment to Turkey in the wake of last month’s failed coup attempt, Ermut said, according to Hurriyet Daily News.
The government in Ankara has been busy reassuring investors that Turkey is a stable country as fears grow the coup will deal an additional blow an already slowing economy. Turkish President Recep Tayyip Erdogan held a meeting with foreign investors last week saying the government will not take any steps that will harm investors, adding that Turkey will continue to build bridges, roads, and airports.
“Regardless of their outcome, which is not determined yet, all projects will proceed”, Ermut also said. Normalising relations with Russia will also contribute Turkey’s FDI performance, according to Ermut. Turkey has attracted around $700mn to $900mn worth annual FDI from Russia over the last five years, Ermut said.
The ruling Justice and Development Party (AKP) has submitted a bill to parliament to create a sovereign wealth fund that will be used to finance infrastructure projects. Its strategic aim is to generate annual growth of 1.5% over the next 10 years.
The planned wealth-management fund would be worth tens of billions of US dollars and will not threaten the country’s low budget deficit, according to Prime Minister Binali Yildirim. The fund may also be used to stabilise markets by buying Turkish assets if needed, Finance Minister Nci Agbal told the news agency.
Data from Turkish central bank showed on August 11 that there was an outflow of $67mn from the equity market last week, bringing the total since the July 15 coup attempt to $617mn. At the same time, the government debt securities markets saw an inflow of $67mn in the week ending August 5. That followed a total outflow of $357mn in the previous two weeks after coup attempt.
Turkey’s equity market has now recovered 2/3 of post-coup losses, Turkish lira is only 2.4% weaker than its pre-coup level, the two-year government bonds and the 10-year Eurobonds are only 50-60bp wider from their pre-coup levels, Tim Ash at Nomura said in an e-mailed comment on August 12, adding “so market has stabilised/rallied back a lot”.
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