Turkey the winner in Gulf's investment hunt

Ithmaar Bank Chairman Khalid Abdulla-Janahi (L) listens to journalists as Gulf Finance House Chairman Esam Janahi smiles at a news briefing in Manama August 27, 2008. (Reuters)

Turkish Daily News | Monday, September 1, 2008


ISTANBUL - Referans

As the increase in oil prices continue to help boost the income of Persian Gulf nations, Turkey is becoming a magnet for Gulf-based investors. Investors there have become nervous of developments in the United States and the West after Sept. 11, 2001, and carried out an “investment hunt” all over the world. Gulf-based investments can be seen in Turkey's finance, healthcare, real estate and media sectors, as Gulf-based capital investment volume has reached $30 billion.

According to Treasury data, 2,430 Gulf-based firms entered Turkey's market in the last eight years. While the number of the Gulf-based firms investing in Turkey was 1,014 in 2003, the figure climbed to 2,430 as of the end of the June this year. Following the acquisition of Türk Telekom by Oger Telekom in 2004, acceleration has been seen in Gulf-based investments. As the number of the Gulf capital-based investments in Turkey increased 140 percent within the last five years, there are 959 Iranian, 542 Iraqi, 247 Israeli, 157 Saudi Arabian, 121 Lebanese and 52 Kuwaiti companies operating in Turkey, while the number of companies from the United Arab Emirates increased to 60 and those from Jordan increased to seven, as of June.

Increasing interest:

While there was no Gulf-based capital invested in Turkey in 2003, investors have since displayed an increasing interest to invest. Treasury data shows that while there was a $43 million-worth Gulf-based capital inflow in 2004, the figure climbed to $1.67 billion in 2005 and to $1.78 billion in 2006. In the first six months of 2008, while U.S.- and Europe-based investments seemed to dry up, Gulf- and Middle East-based capital inflow eased markets. The figure of Gulf- and Middle East-based investments in Turkey rose to 3,500 in July.

Investing in agriculture:

The recent global rise in food prices has caused the Gulf countries to accelerate their pursuit of investment in the agriculture sector. Countries such as the United Arab Emirates, Qatar, Bahrain and Saudi Arabia began to focus on agricultural investment projects in Turkey. Aiming to establish strategic food reserves, Saudi Arabia announced it was continuing to negotiate with Turkey, Ukraine, Pakistan, Egypt and Sudan to invest in strategic food products such as wheat, corn, rice, soybean and clover in at least a total of 100,000 square meters of fields. As such, Gulf nations, which manage $2 trillion-worth of capital, are going to add a new sector to their investment portfolio in Turkey.

Three Gulf-based investors have launched $1 billion-worth of investment projects in Turkey, Philippines, India, Sudan and Mali. Gulf Finance House, operating energy investments in Qatar, Bahrain-based Ithmaar Group, and the UAE-based Abu Dhabi Investment House convened in Doha, the capital of Qatar, and agreed to invest in five fundamental areas in Turkey. These areas are listed as biomedicine, agriculture, stockbreeding, biofuels and agriculture technologies.

Gulf-based investors in Turkey

  • Kuwait Investment Authority has acquired Cevahir Business Center.
  • Emaar Properties, owned by the Sheikh of Dubai El Maktoum, is planning a $5 billion-worth investment in Turkey by 2010, focusing on healthcare, shopping malls, hotel and real estate areas.
  • Abraaj Capital, an investment firm specializing in private equity investments in the Middle East, North Africa and South Asia, partnered with the Ac?badem Hospital and then the Numarine yacht company.
  • Dubai Islamic Bank opened a representative office in Turkey.
  • The International Investor, a Kuwaiti investment group, acquired 75 percent of the share of Docar, a Turkish car rental company, for $24 million. The company is planning to found a consumer financing company as well as looking into second-hand vehicle sales, financing and participant banking.
  • The Arab Banking Corporation opened a representative office in Turkey. The firm may yet acquire a Turkish Bank.
  • Oger Telecom acquired Türk Telekom for $6.5 billion.
  • Kuwaiti Alshaya Group, which brought prominent global brands such as Starbucks Coffee, The Body Shop, Topman and Topshop, is planning a $100 million-worth investment in Turkey in three years.
  • Kuwaiti International Leasing Investment founded Haliç Leasing with $5 million capital. The group is looking to operate as an investment bank in Turkey.
  • Dubai Islamic Bank acquired MNG Bank.
  • Dubai Multi Commodities Center, or DMCC, plans to enter Turkey's gold and tea markets.
  • The National Commercial Bank, or NCB, the biggest bank of Saudi Arabia, acquired Türkiye Finans.
  • Kuwaiti investment group The International Investor acquired Adabank.

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