Recently, I attended a seminar organised by the Singapore Exchange. The topic was on investments in Turkey.
Among the few speakers who spoke about the introduction of Turkish economy, was the chief executive officer of Borsa Istanbul (short abbreviated as BIST) Ibrahim Turhan. Through him, I have achieved an eye-opener and have developed an interest in exploring this new economy and thus I will share with you.
Officially known as the Republic of Turkey, this country is surrounded by eight countries and is situated at the crossroads between Europe and Asia, and its main religion is Islamic faith that stakes about 98 per cent of its population.
Its biggest city is Istanbul which has circa 13.5 million populations and it also serves as a hub for finance and economy. To date, Turkey is not part of the 17 nations in eurozone but it is one of the founding members of G20 nations and Organisation of Economic Co-operation and Development (OECD).
In 2012, Turkey has a purchasing power parity of US$1.125 trillion and was ranked as seventeen largest in the world. The average income per capita is about US$15,000 while it has a labour force of 27 million, spread across the agriculture, industrial and services sectors. The unemployment rate stands at about nine per cent as of last year with inflation rate nine per cent. The majority economy sits in middle income class with citizen poverty below 16 per cent.
On macroeconomy, the public debt of Turkey is about 40 per cent of gross domestic product output and is considered healthy compared to most of the current European nations. The country’s reserve recorded US$93 billion with main exports of agricultural products. The industrial exports cover light commercial vehicles, textiles, food processing, electronics and mining materials.
In April, the country demutualised the Istanbul Stock Exchange, Istanbul Gold Exchange and Derivatives Exchange into a newly combined Exchanged known as BIST. This is a very young Exchange and home to more than 300 national companies. According to statistics, the yields of many listed companies in BIST like banks, telecommunication and manufacturing corporations have paid higher dividends to investors compared to those traded in developed economies like London, New York, Hong Kong, and Singapore.
Best of all, what surprised me is the median age of this country is only 29 years old. With this young and vibrant population mostly in middle class, I could imagine the demands in modern electronics and gadgets among the young generations. The development of real estates and property will be vast to satisfy the thirst of people waiting to setup new homes through marriages.
Moreover, the distribution of lifestyle products and apparels could be competing very fiercely to capture the visual liking of consumers. Automobiles and hardware industries will be another good business source when demands rise to pursue the improvement of increasing income groups.
In summary, there are just too many wild dreams in my mind to find out more about Turkey. What could be the fastest way to invest in the rising economy while sitting in our safe couch at home? Moving forward, I would be very eager to source the REIT shares, manufacturing stocks and ETFs that are based in Turkey. As the tourism rises rapidly over years, it will pay off well to include the setup of portfolio with developing companies of national infrastructure and transport projects in Turkey.
Stay tuned with our column as we shall continue to provide more money-making opportunities. Definitely, Turkey could be our next investment target.
Dar Wong is the principal consultant of APSRI. The expressions are solely his own. He can be reached at [email protected].