Foreign funds have billions at stake in Turkish market volatility

Foreign funds have billions at stake in Turkish market volatility
A man walks past a foreign currency board in a currency exchange shop, in Istanbul. (AP)
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Updated 26 March 2021

Foreign funds have billions at stake in Turkish market volatility

Foreign funds have billions at stake in Turkish market volatility
  • Foreigners have reported $3.4 billion in Turkish asset holdings this year
  • Turkish lira plunged around 10% after central bank governor replaced

LONDON: Foreign funds have reported about $3.4 billion in Turkish stock and sovereign dollar bond holdings so far this year, much of which could be loss-making after the sudden firing of central bank governor Naci Agbal rocked local markets.
Agbal was ousted by President Tayyip Erdogan at the weekend and replaced by Sahap Kavcioglu, a former lawmaker who appears to share Erdogan’s view that high interest rates cause inflation.
“Investor confidence in Turkey is completely shot to pieces,” said Jason Tuvey, senior emerging markets economist at Capital Economics. “So long as Erdogan is there, there will be many investors that will simply no longer be willing to put their money into the country for a sustained period of time.”
The Turkish lira plunged around 10 percent after Agbal’s departure, some Turkish dollar-denominated bond prices fell to the lowest in 10 months, while Istanbul-listed shares logged their worst two days since the 2008 crisis.
Among international mutual funds, Fidelity Investments has reported one of the largest holdings in Turkish assets this year, with $552.7 million across two bond funds in its latest disclosure at the end of January, according to data provided by Morningstar.
A couple of iShares exchange traded funds (ETFs) had about $398.6 million invested in Turkish equities, disclosures on Monday showed, according to the Morningstar data.
Cambria ETFs, Sprott, HSBC, JPMorgan and Invesco have been among others to disclose holdings, mainly in ETFs, as recently as this week, the data showed. Reuters was unable to verify whether those investments were made before or after Agbal’s exit.
Legal & General, BlueBay Asset Management, Union Investment, Arca Fondi, Vanguard and Schroders have also disclosed significant holdings of Turkish assets this year.
“We have not altered our position (on Turkish debt) as we are waiting to assess whether there will be a broader material change in monetary policy stance in Turkey,” said Sergey Dergachev, senior portfolio manager at Union Investment.
Fidelity declined to comment. The other funds didn’t respond to requests for comment.
Agbal, the fourth governor in five years, had soothed some investor concerns about Erdogan’s perceived meddling in monetary policy and his repeated calls to cut interest rates. Between November and his sacking, the lira rallied around 16 percent.
Many funds were likely lured into increasing their exposure to Turkish assets by the appointment of Agbal, who in subsequent months lifted the policy rate by 875 basis points to 19 percent, the largest increase of any big economy.
In recent weeks, Turkey along with most emerging markets, suffered as bond yields raced up in the United States and other advanced economies and the dollar surged.
So while Turkey-dedicated equity funds had sucked in $245 million so far this year up to March 17, EPFR data show bond funds saw an exodus of $977.6 million over the same period.


PIF-backed Noon signs deal with UAE emirate to support small businesses

PIF-backed Noon signs deal with UAE emirate to support small businesses
Updated 16 min 27 sec ago

PIF-backed Noon signs deal with UAE emirate to support small businesses

PIF-backed Noon signs deal with UAE emirate to support small businesses
  • SMEs in Ajman will be able to promote and sell their products through the e-commerce’s company’s “Noon Mahali” platform

DUBAI: The UAE emirate of Ajman has struck a deal with online retailer Noon to support the growth of small businesses.
It will help members of the emirate’s Tazz program for small and medium-sized enterprises, as well companies that are signed up to the Riyada program for small business owners and e-commerce license holders.
“Through this cooperation, we aim to inspire innovation, encourage local entrepreneurs and assist in the SMEs’ digital transformation in the emirate,” Abdulla Bin Nassir Al-Nuaimi, Ajman DED’s director of planning and development, said.
SMEs in Ajman will be able to promote and sell their products through the e-commerce’s company’s “Noon Mahali” platform, which is specifically designed for them.
There will also be training sessions and other activities to guide sellers in making the most of Noon’s platform.
Al-Nuaimi said the private sector “has become a major partner and supporter of the government sector” in strengthening local businesses.
The move follows the UAE’s wider push to revitalize its SME scene as the country diversifies its income sources and encourage more economic activity amid a pandemic-induced slowdown.


Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
Updated 19 April 2021

Revenue management systems key to success of Saudi health reforms says KPMG

Revenue management systems key to success of Saudi health reforms says KPMG
  • The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator

RIYADH: Robust revenue cycle management systems will be essential for Saudi Arabia’s new health care model, KPMG said in a report.
The Kingdom’s Ministry of Health (MoH) is transitioning from being an all-in-one payer, provider and regulator of health services to becoming a regulator, governing corporate payers and providers.
A key aspect of this transformation is the separation of the payer and the provider functions in the public health care sector, KPMG said. To facilitate future reimbursement to public health care providers, the Ministry of Health has set up the Program for Health Assurance and Purchasing (PHAP).
In addition, the Council of Cooperative Health Insurance (CCHI) has also firmed up regulations for private insurers.
With the introduction of mandatory health insurance underway in the public sector in the Kingdom and the wish to standardize across the public and private sector, Saudi health care providers will need to develop new capabilities to be able to generate revenue under the new reimbursement system, KPMG reported.  
“One of the key implications for health care providers of this introduction is the transformation of how health care service providers are reimbursed. Providers will primarily be paid on a per-patient basis, rather than via allocated budgets from the government,” said Emmeline Roodenburg, head of health care at KPMG in Saudi Arabia.
Patient acceptance and registration; billing and claims management; patient treatment and documentation; and coding and grouping are the four key operational elements of the Revenue Cycle Management (RCM) under the new mechanism.
While the risks that come with having a poor RCM function can be managed and mitigated, if they are left unchecked then the consequences could include revenue losses and fines for inaccurate invoicing, KPMG said.


Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
Updated 19 April 2021

Fashion retailers launch dedicated Gulf online stores

Fashion retailers launch dedicated Gulf online stores
  • The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers

DUBAI: Global fashion brands are launching dedicated online platforms as the pandemic upends shopping habits in the region.

Brands are launching dedicated channels as online shopping booms across the region.

Germany-based Hugo Boss has become the latest brand to open a regional online store serving Saudi Arabia, the UAE, Kuwait, Bahrain and Oman.

Customers can now shop through those dedicated online platforms, which will feature exclusive deals and collections.

E-commerce leaders said the pandemic has accelerated the industry's digital push.

Last year, luxury brands Bulgari, Louis Vuitton, and Dior launched their online selling platforms in the region, at the height of COVID-19-induced lockdowns and curfews.

Diesel has also announced an e-commerce platform targeting the UAE and Saudi markets.

Fashion labels  have been reinventing ways to engage with customers who are used to visiting stores to try on garments.

Some companies have also started to use 3D technology and augmented reality to create a holistic shopping experience for their customers.

 


Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
Updated 19 April 2021

Riyadh allows development on endowed lands as it eyes population doubling

Riyadh allows development on endowed lands as it eyes population doubling
  • The decision allows planning, development, sale, purchase and other services

RIYADH: The Royal Commission for the City of Riyadh (RCRC) has lifted the suspension of development on large parts of the endowed lands north of King Salman Road, Saudi Press Agency reported.
The decision allows planning, development, sale, purchase and other services, provided that everything is compatible with the urban code of the city.
It is part of a series of measures aimed at helping the Saudi capital accommodate twice the current population by 2030, RCRC said
The commission said that Riyadh’s strategy is expected to put the city among the top ten cities in the world in terms of economy, competitiveness and quality of life by 2030.
A specialized committee has been formed to look into land affairs and the RCRC has also created a call center to improve communication with the public.

 


Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
Updated 19 April 2021

Saudi public debt issuance up 50% in 2020 to $43.4bn

Saudi public debt issuance up 50% in 2020 to $43.4bn
  • The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020

RIYADH:  Saudi public debt issuance increased by nearly 50 percent in 2020 to SR163 billion ($43.4 billion), the Capital Market Authority reported.
Non-government debt issuance increased by more than 250 percent reaching SR31 billion compared to SR9 billion in 2019.  
The market value of stocks and debt instruments reached SR9.8 trillion by the end of 2020, the Authority said in its annual report.
That represented a rise of 335 percent when compared to 2017 when it launched its three-year Financial Leadership Program that ran until last year.
The Authority has been developing its strategic plan for the next three years 2021-2023 in line with updated plans to expand the Kingdom's financial sector.