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Interview by Riccardo Orcel, Deputy CEO of VTB Group, Head of VTB International for Hurriyet

25 December 2016
Hurriyet
Opportunities for investors in Turkey

While all international investment banks around the world are emerging from developing countries they find risky, there is one that plans to increase their investments. Riccardo Orcel, Deputy CEO of VTB Group, Head of VTB International, Russia's largest international investment bank, stressed that the energy, logistics and transportation sectors in the Turkish market have a potential for growing and provide great opportunities for investors.

TURKEY’S LOST INVESTORS

The situation with foreign investors leaving the Turkish market was widely discussed recently. Some of the foreign investors came out of the country, as Moody's lowered Turkey's rating below the investment grade. But not all foreign investors agree. VTB Capital, Russia's largest international investment bank, views Turkey as a great opportunity. "We believe that Turkey will recover as quickly as it did in the past, despite the recent mild economic slowdown," stressing Turkey is an attractive market for international investors, said Deputy CEO of VTB Group and Head of VTB International Riccardo Orcel. “The depreciation of the Turkish lira could provide an opportunity for those who want to invest," he said.

VERY GOOD FOUNDATION

Orcel answered Hürriyet’s questions, noting that VTB Capital plans to expand Turkey operations. Emphasizing Turkey's positive demographics, qualified and competitive labor force, and a large domestic market, Orcel said that Turkey’s unique geographic position connecting the East and the West provides an attractive environment for investment. Orcel also stated that the ability of the domestic economy to recovery quickly after geopolitical uncertainties has historically been one of Turkey’s advantages. He said said that energy, transportation and logistics sectors in Turkey stand out for investment.

ENERGY AREA

"Turkey is a very important center in the energy network of Europe and Asia. Although it does not have a large amount of underground energy resources, it plays a very important role in transporting resources from East to West. In this framework, the energy sector has huge business opportunities for international companies. Transport and logistics are also attractive sectors. " Orcel emphasized that in 2017 the economy is expected to recover in Turkey and that the strengthening of the dollar will enable Turkish exporters and companies with operations abroad to grow. Orcel noted that the continuation of infrastructure investments will support Turkey's growth. "Turkey's economy is a dynamic economy and can recover quickly from challenging trends. For this reason, we expect economic activity to improve in 2017," he said.

700 MILLION DOLLARS TO TURKEY

Riccardo Orcel stated that they evaluated Turkey as one of the priority markets along with other emerging markets, such as China and India. Bearing in mind that they are active in the Turkish market in terms of lending, mergers and acquisitions, commodity and capital markets, Orcel noted that they have strengthened the Turkish franchise through transactions worth over $700mn. Orcel, indicating that Turkish companies support their international investments, said: "We have advised the Turkish company Yıldırım Group to purchase Tertir, Portugal's largest port operator, with port operations in Spain and Peru. We have advised China Merchants Group on the acquisition of Kumport, helping to bring $940mn of investment into Turkey. In African countries we are considering several projects to work together with Turkish construction companies engaged in PPP projects. VTB Capital issued a Turkish lira bond issue for the first time in Turkey with an issue of 2 and 3 year bonds worth TL600mn."

WHAT ARE VTB’S PLANS IN TURKEY?

"We believe that Turkey will continue to grow among emerging economies," said Orcel, noting that VTB Capital is currently one of the few investment banks in actively seeking to invest in emerging markets during a period in which almost every global investment bank is lowering its risk exposure to developing coutnries. divesting from EM. “We plan to become more involved in the Turkish market. We see some interesting opportunities in mergers and acquisitions, commodities, credit markets. We are partnering with Limak Holding and the Swiss company Flughafen Zürich for a bid to operate the airport in Sofia, one of the operations of Bulgaria."


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