Business as usual in Turkey, say Singapore firms

Shoppers browsing in an arcade in the Mahmutpasa district of Istanbul, Turkey, last week. Despite global perceptions, there is no disruption to daily life there. Only critical buildings and the airport have beefed up security checks.
Shoppers browsing in an arcade in the Mahmutpasa district of Istanbul, Turkey, last week. Despite global perceptions, there is no disruption to daily life there. Only critical buildings and the airport have beefed up security checks.PHOTO: BLOOMBERG

Singapore companies there say coup attempt last month has not affected their operations

The July coup attempt in Turkey may have shocked the world, but it is business as usual for Singapore companies operating there.

The coup attempt lasted all of one night but nearly 300 people were killed and some 1,400 people wounded. Analysts expect that the crackdown on coup participants will add to the domestic upheaval in the country.

But Singapore firms said the problems have not affected their business so far, and believe that the long-term prospects for the country remain bright.

Singapore-listed IHH Healthcare - which owns a majority stake in Acibadem Holdings, Turkey's largest private healthcare operator by beds - operates 15 hospitals in the country.

REASON FOR OPTIMISM

The dust has settled... In a nutshell, investor confidence is on the road to recovery.

MS MABEL NEO, Istanbul-based director of International Enterprise (IE) Singapore

"We have had no reports of disruptions to our operations," a company spokesman said in an e-mail. "Our operations in Turkey have continued to perform well despite the muted macroeconomic outlook and geopolitical uncertainty."

He said that it would be premature to speculate on the impact of the coup attempt, adding that the company remains confident of Turkey's long-term prospects.

Port operator PSA International runs Mersin Port, one of Turkey's most important ports as it is situated along the country's eastern Mediterranean coast. A company spokesman said that operations there were "carrying on as normal".

Others, including commodity trader Olam, which is Turkey's second-largest hazelnut exporter, and logistics and commodity company CWT Limited, said that it was business as usual for them.

Analysts are also predicting that the coup could have longer-term repercussions on the country.

S&P Global immediately downgraded Turkey after the coup attempt, although Moody's announced earlier this month it would keep its investment grade.

"Turkey may avoid an imminent Moody's downgrade, but it is likely to lose its investment-grade status over a 12-month horizon," analysts from Societe Generale said in a July 27 report.

A Reuters survey of 41 economists predicted that the economy would grow 3.5 per cent this year, below the Turkish government's forecast of 4.5 per cent, because of dips in tourism. The number of foreign visitors to Turkey fell more than one-third in May, its biggest drop in at least 22 years.

But Istanbul-based director of International Enterprise (IE) Singapore, Ms Mabel Neo, is cautiously optimistic on Turkey's business prospects.

She told The Straits Times that, despite global perceptions, there was no disruption to daily life. Only critical buildings and the airport had beefed up security checks.

Ms Neo said that there was consistent interest from Singaporean companies to explore the Turkish market, particularly in the areas of infrastructure and healthcare, where there are already Singaporean players present.

In fact, she will be hosting four companies interested in exploring business opportunities in the next two weeks, she said.

Singapore also signed a comprehensive free trade agreement with Turkey last year, which is expected to be ratified next year.

The pact, which is Turkey's first comprehensive agreement will cover areas such as government procurement and e-commerce.

This will allow Singapore companies to bid for procurement contracts from Turkish government entities, including its 30 metropolitan municipalities.

While analysts have cited risks of Turkey's political fragmentation, Ms Neo said that Turkish businesses were "very, very optimistic".

The businessmen have told her that the political situation has improved, as the ruling party and opposition are more unified.

"The dust has settled," said Ms Neo, adding that there has been no drastic change in Turkish government policy and that ongoing projects are continuing.

"In a nutshell, investor confidence is on the road to recovery."

However, she noted that the government's ongoing purge, in which some 76,000 civil servants have been suspended, needed close monitoring.

But she admitted that it would be "challenging to encourage new entrants", adding that a planned business mission for local companies in construction solutions had been postponed to the end of the year.

A version of this article appeared in the print edition of The Straits Times on August 15, 2016, with the headline 'Business as usual in Turkey, say firms'. Print Edition | Subscribe