Outward Direct Investments Nearing $24bn

Image Almost 3,500 Turkish companies are currently operating in 103 countries. Nearing $24bn, Turkish outward direct investments intensify in energy, banking, communications, manufacturing and commerce. According to a study from the Ankara Trade Chamber based on Treasury and Central Bank data, outward direct investments, at a mere $3.7bn by 2001, shot up to $23.6bn as of September 2010. Therefore, near $20bn of the Turkish investment abroad has been made in the past decade. Out of that sum, $21bn consist of capital brought out of Turkey as paid-in capital, as well as, profits and other funds that cross-border investors have chosen to keep out of Turkey. A further $2.6bn is accounted for by credits issued to companies established abroad by their owners in Turkey.

LARGEST INVESTMENT IN 2007
By end 2000, there were 1,154 companies with Turkish capital established outside Turkey. In 2001 $ 1.45 bn were transferred
abroad for 114 companies. The respective figures in 2002 were 126 enterprises and $482m.

A total of $412m was brought out of the country in 2003 for 144 companies. The amount of capital rose to $860m and the num- ber of companies to 209 in 2004.

On a persisting uptrend, the number of companies increased to 127 in 2005 while the amount of capi- tal shot up to $1.39bn. Worth of attention is the acceleration in 2007.In excess of $3.39bn were transferred from Turkey in 2007 for 382 companies set up abroad.
Both companies and capital declined in the follow- ing year to 339 and $2.86bn. As the global crisis adversely impacted investments, outward direct investment fell to $1,69bn in 2009 and further down to a mere $807m in the first nine months of 2010. Likewise, the number of companies starting to operate in foreign countries, fell to 326 in 2009 and 138 in 2010.

According as of September 2010, the number of companies with Turkish capital operating outside Turkey soared to 3,491 of which 67 percent set up in the past decade.

BY SECTORS
Out of the direct investment made abroad by September 2010, the largest portion or $4bn was destined for the energy sector. A further $3bn has been invested in banking and $1.4bn in non-bank financial institutions. Turkish investors have also transferred $2bn to finance manufacturing projects. Commercial exchanges have lured $1.6bn, infor- mation and communications $1.5bn and building $ 444m.

BY COUNTRIES
Most alluring for Turkish direct investments have been the Netherlands, Azerbaijan and Malta. Worthnoting that Turkish companies are investing in third countries via holding companies set up in countries such as the Netherlands, Luxembourg and Malta.
The list of favourite investment locations also include Germany, the USA, Kazakhstan and the United Kingdom. Countries like the Netherlands are especially attrac- tive for Turkish investors due to tax advantages. Worthnoty that the $5.1bn worth of direct invest- ment transferred to the Netherlands so far has been largely channeled into banking, other financial entities and manufacturing.
Almost the whole ($3.6bn), of the $3.8bn transferred to Azerbaijan was  destined for the energy sector. Some $1.4bn have been invested in Malta, $739m to Germany, $728m in the USA, $719m in Lu x e m b o u r g ,    $ 6 3 1 m in Kazakhstan and $443m in the UK.

Treasury figures have also shown that $2.2bn worth of profits were transferred to Turkey over outward direct investments in the past decade. ATC has also pointed out that 75 percent of the out- ward direct investment was aimed at financing the creation of companies.

A further 22 percent was designed to finance the acquisition of stakes in existing enteprises and 3 percent joint ventures.

ANKA Review, February 01, 2011 Tuesday, Vol 32 No:1614
To get a subscribtion an ANKA Review weekly for Turkish Economy in English go to
http://www.ankaajansi.com.tr/index.php?&sitelang=en

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