Your correspondent likes a busy life. No sooner returned from Dubai than I was off for a debut appearance, speaking for the ACT for the first time at the GTR Turkey event in Istanbul.
If you’ve never been, go. A huge complex city and country that is an important trade partner for the UK. In fact the UK is their second largest export market after Germany.
As with many other emerging/developing/maturing (take your pick) markets, Turkey’s treasury and finance issues are familiar yet have their own twist. Yes currencies fluctuate but the Turkish Lira fell 65% against the dollar during the most recent political/economic crisis following the attempted coup in 2016! When Turkish corporates owe $150bn+ that’s a lot of urgent restructuring! When that hits bank liquidity as well, then corporate to bank lending slows, trade finance especially and for an export-driven economy that makes life very difficult particularly in SME trade and funding. That’s been compounded by sovereign credit downgrading which affects OECD ECA pricing.
Access to international capital markets isn’t impossible but for a large number of family held, unrated corporates the credit journey is complex. Much was made of Istanbu beng only the 68th largest financial centre in global terms – regional influence ceded to Dubai some say.
On the other hand, the prospects for some were positive if Turkey looks east and south not west. Syria could be a big opportunity (in construction, financial services, food) and Turkey has strong relationships in Central Asia. Some were arguing for more Islamic finance in trade although the usual issues over consistency and transparency were heard
Turkish treasurers however are well in the game. Enthusiastic for new treasury tech (although cost is an issue), traditionally skilled in trade finance, well educated, progressive and close to the top table if not already there. I doubt anyone understands FX better! I was struck by the talent and commitment to sustainable finance – born of necessity perhaps – but even in my old treasurer days it was always clear that Turkish business understands the value of cash and knowing how to keep it moving!
All in all, a fascinating few days. A Turkish delight one might say.
Packed house #GTRTURKEY pic.twitter.com/rclmLzsern — Peter Matza (@PeterMatza) March 5, 2019
"exports are the backbone of the economy," says #GTRTURKEY panellist. However, for Turkey, an almost unique challange is that it has to import to export. Major longterm domestic manufacturing investment is needed to change this and optermise supply chains. — Drew Nicol (@JournoDrew) March 5, 2019
Since the dawn of civilisation Istanbul has played a vital role as the trade bridge between Asia and Europe. Blockchain, AI, US sanctions, coups or Brexit won't change that. Big banks and corps are bullish of the long-term trade outlook, despite looming recession. #GTRTURKEY — Drew Nicol (@JournoDrew) March 5, 2019
