Weak TRY spurred foreign purchases of Turkish companies, says KPMG head
As the Turkish lira weakens, foreign investors who had shown merely an interest in Turkish companies have now begun to make purchases. “They do not just come and have look, they close the sale,” KPMG Turkey President, Murat Alsan, told Dunya. “Currently all of our co-workers who do due diligence are all fully occupied. We closed four sales in the previoıus week.” If Turkey does its homework, Alsan added, 2018 should be a very positive year.
“Companies which had already analyzed Turkey in recent years are now coming to make purchases,” he said. “The currency level here is very decisive. So you’ve come in the past; you like a company but for some reason you have not made a purchase. Now those assets can be bought at better prices. They do not think too much because they have had a look at the copmany already. Sales can be closed very quickly. Foreigners are interested in Turkish companies of any size from any sector. There are currently 7-8 ongoing negotiations in our company.”
After years of difficulty with European countries, signals over the last few weeks suggest an improving environment, Alsan added. “This is a very positive development because they are our export markets as well,” he said. “The solution of the visa problem with the United States was also perceived as a development that clearly shows there is a return to positive relations. At the beginning of 2017, investments were coming from the east and the south. Now they are progressing in a balanced manner with an increasing interest from Europe and the United States. The investments coming from the Middle East are being replaced by investments mainly from Austria, Germany and the Netherlands. We have also noticed serious interest from American-based companies.”
Qual ty of regulat ons s essent al
Alsan warned, however, that Turkey’s regulatory framework needs to improve. Positive developments in regulations began after 2002, he noted, and a period of intense regulatory activity continued until 2010-2011. Then attention shifted to geopolitical developments. “Turkey increased its richness, production and exports in each period it improved the quality of regulations,” he said. “Now the country needs to return to that way of thinking. For example, an arrangement related to VAT is needed. Exporters face difficulties in getting their tax return in VAT. An arrangement to regulate the food supply may also slow down inflation. Regulations on incentives are also needed.”