Economic Bulletin
September 2014
Türk Telekom
[This page is intentionally left blank]
Economic Bulletin
September 2014
Türk Telekom
This bulletin is prepared by Assoc. Prof. Rasim ÖZCAN.
September 2014, İSTANBUL
Disclaimer
This document contains information, text, images, logos, and/or other material that is protected by copyrights, database rights,
trademarks, or other proprietary rights. It may not be reproduced, distributed, published or used in any way by any person for any
purpose without the prior written consent of the preparer, Türk Telekom (the Company) or in the case of third party materials, the
owner of that content.
The material contains statements about future events and expectations that are forward-looking statements. Any statement in this
material that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties
and other factors. Except to the extent required by law, we assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. The interpretations,
estimates and/or opinions reflect the judgment of the authors, not the Company, on the date of this document and are subject to
changes without notice.
This report does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities
and nothing contained herein shall form the basis of any contract or commitment whatsoever. The information used in this report
has been obtained from public sources that are believed to be reliable. No reliance may be placed for any purposes whatsoever on
the information contained in this report or on its completeness, accuracy or fairness. None of the Company nor any of its shareholders, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any
use of this report or its contents or otherwise arising in connection therewith.
Please also note that the views and opinions expressed in the article(s) are those of the author(s) and do not necessarily reflect the
views, official policy or position of the Company.
The month of August was full of changes: for the first time the
President is elected, there is a new government with a new Prime
Minister. And all subsequent effects on politics and economics
together with the foreign developments like ECB’s and FED’s decisions formed the markets and expectations. We all know much
about Recep Tayyip Erdoğan, the first directly elected President
of Turkey. However, not many people know that Ahmet
Davutoğlu, the Prime Minister of Turkey, has Economics degree
as well from one of the most prestigious university in Turkey,
Boğaziçi University. Congratulations to both. Their success is
Turkey’s success.
Well! Following the Bulletin’s tradition, I discuss Turkey’s main
macroeconomic indicators along with stock and bond markets’
performances as well as exchange rate movements. I also cover
leading macroeconomic indicators from US and European economies.
This month’s special topic is titled as “The Best may not be the
Best: Innovation towards Creating Sellable Products,“ which discusses choices that define a company’s direction and its innovation policy, hence its products; probably the whole industry or creation of a new industry or shape the whole society. There are
tradeoffs, and the choice is clear: go with the one leading you towards creating sellable products as a result of right innovations.
Hope to meet you again in the next issue…
Assoc. Prof. Rasim ÖZCAN
CEO Advisor
Türk Telekom
[This page is intentionally left blank]
CONTENTS
EXECUTIVE SUMMARY……………………….……………….……….6
WHAT TO WATCH IN SEPTEMBER..….……...............….….……......7
RECAP OF TURKISH MACRO DATA
Industrial Production….………………………….……………...8
Capacity Utilization Rate…....…...………...….…………….….8
Unemployment……..…….…...………….................…….........9
Inflation….…...……………..…..…………...….…..….…........10
Foreign Trade Balance….…………..………………………...11
Current Account Balance………..…………….…...……...….12
Fiscal Balance………….…………………………..……..……12
Central Government Debt Stock…………………………......13
Monetary Policy.……...……………………………….....…….14
Consumer Confidence Index.……......…...…….…...……….15
Real Sector Confidence Index……….….....…………………16
Survey of Expectations.…….….......……..…...….…..………16
RECAP OF EU & US MACRO DATA
Gross Domestic Product.......…………………………….…...18
Industrial Production………………...………………………...18
Unemployment…………………….……..…………………….19
Inflation….…...……....…......……....………..……..…….…...20
Foreign Trade Balance……….…...…..………………………21
Current Account Balance…….………..………………………22
Consumer Confidence Index………...…...…………………..24
TURKISH MARKETS REVIEW
Stock Market………...………....…………………………..…..25
Bonds and Bills Market….……….………..…..……...…..…..26
Exchange Rates…………...…….…...…....…………………..27
Real Effective Exchange Rates..…….….....…………………28
SPECIAL TOPICS
The Best may not be the Best
Innovation towards Creating Sellable Products……….…...29
MONTHLY CALENDARS (TURKEY & GLOBAL)
TÜRK TELEKOM GROUP CORPORATE FACT SHEET
EXECUTIVE SUMMARY
TURKEY
EU & US

The calendar-adjusted industrial production index increased
by 1.4% y/y in June.

Compared to one month ago, the capacity utilization rate
(CUR) edged down from 74.9% to 74.7% in August.

Compared to one month ago, the unemployment rate eased
down from 9% to 8.8% in May.

Compared to one month ago, the CPI is up by 0.09% in August.

Compared to one month ago, the current account deficit is
up from US$ 3.5 bn to US $4.1 bn in June.

In its meeting, the Monetary Policy Committee decided to
cut the upper bound of the interest rate corridor by 0.75%.
Now, the O/N lending rate is 11.25%.

Compared to one month ago, the consumer confidence index edged down from 73.9 to 73.2 in August.

The BIST-100 recorded a minimum of 76,692 and a maximum of 82,094, and closed the month of August at 80,313
(down by 2.7% compared to the end of July).

The benchmark bond yield closed the month of August at
9.07%, fluctuating between 8.74% and 9.51%. The yield
increased by 6.1% compared to the end of July.

According to the flash estimates, the GDP increased by
0.2% in the euro area and 1.2% in the EU28 in 2Q 2013 on
year-on-year basis.
According to the second estimates for 2Q 2013, compared
to the preceding quarter, the GDP in the US increased at an
annual rate of 4.2 % (the advance estimate was 4.0%).
Compared to one month ago, in July, the seasonally adjusted unemployment rate remained stable both in euro area
and in the EU27.
In the US, compared to one month ago, the seasonally adjusted unemployment rate went down from 6.2% to 6.1%.
On annual basis, the CPI inflation in July registered as
0.4% in the euro area and 0.6% in the EU28. The CPI inflation in the US increased by 2%.
In August, the consumer confidence index decreased both
in the euro area (from -8.4 in July to -10.0) and in the EU 28
(from -5.5 in July to -6.4). In the US, following the revised
July reading of 90.3 (revised down from 90.9), the consumer confidence index increased to 92.4 in August.





6
WHAT TO WATCH IN SEPTEMBER
TURKEY
 Turkish Treasury will deliver domestic debt redemption of TL
177 ml. (September 3).
 Turkish Treasury will deliver domestic debt redemption of TL
580 ml. (September 10).
 The GDP readings for 2Q will be posted (September 10).
 Turkish Treasury will hold auctions of TL denominated zer
coupon bond with the maturity of 14 months (new issuance)
(September 16).
 Turkish Treasury will deliver domestic debt redemption of TL
1.34 bn. (September 17).
 Turkish Treasury will hold auctions of TL denominated fixed
coupon bond (semi-annually couponed) with the maturity of 5
years (re-opening) and floating coupon bond (semi-annually
couponed) with the maturity of 7 years (re-opening)
(September 22).
 Turkish Treasury will hold auctions of TL denominated fixed
coupon bond (semi-annually couponed) with the maturity of 2
years (re-opening) and TL denominated fixed coupon bond
(semi-annually couponed) with the maturity of 10 years (reopening) (September 23).
 Turkish Treasury will deliver domestic debt redemption of TL
10.96 bn. (September 24).
 The
Monetary Policy Committee meeting will be held
(September 25).
EU & US
 Second GDP estimates for the second quarter will be posted
in the EU (September 5).
 The employment situation for EU (September 5).
 The Fed’s FOMC meeting will begin (September 16).
 The Fed will announce its interest rate decision as well as its
latest summary of economic projections, followed by the Chairman’s press conference (September 17).
 The ECB meetings (September 17-18).
 The US GDP figures (September 26).
7
RECAP OF TURKISH MACRO DATA
Industrial Production
Industrial production:
1.4% y/y increase in June
Following 3.5% y/y growth in May, the calendar-adjusted industrial production index increased by 1.4% y/y in June. Compared to
one month ago, seasonally and calendar adjusted industrial production was up by 0.1% in June (after -1% in May). As a reminder, the calendar-adjusted IP has kept increasing on a yearly basis
since December 2012.
The seasonal and calendar-adjusted industrial production index
increased by 0.1% on a yearly basis.
The industrial production readings suggest that the wheels of
Turkish economy keeps rolling at a faster pace compared to one
month ago. Among the main industrial groups, the largest increase was in capital goods by 9.9% in June according to the
seasonally and calendar adjusted series. In sub sectors of manufacturing, the largest increase was in manufacture of other
transport equipment by 26.8%, followed by repair and installation
of machinery and equipment by 10.3% compared to a month ago.
Calendar-Adjusted Industrial Production Index
140
30
20
100
10
80
0
60
-10
40
Annual Growth,%-RHS
Industrial Production Index-LHS
20
Annual Growth (%)
Industrial Production
120
-20
0
-30
3 6
9 12 1 3 6
2008
2009
9 12 1 3 6
2009
2010
9 12 1 3 6
2010
2011
9 12 1 3 6
2011
2012
9 12 1 3 6
2012
2013
9 12 1
2013
2014
Source: TURKSTAT
Capacity Utilization Rate
Capacity utilization rate:
Not bad
Compared to one month ago, the capacity utilization rate (CUR)
eased from 74.9% to 74,7% in August and remained at a comfortable level in terms of creating inflationary pressures. Compared
to one year ago, the CUR was down by 0.8 percentage points
(down from 75.5%).
Compared to one month ago, the seasonally adjusted CUR came
out as 74.1% in August. In line with the unadjusted series, compared to one year ago, the seasonally adjusted CUR was down
by 0.8 percentage points (down from 74.9%).
According to the changes compared to the previous year of the
8
CUR level, 11 sectors advanced, one sector stayed the same and
12 sectors have lower CUR levels. Note that domestic developments and global economy, especially FED’s decisions and developments in the euro area after ECB’s recent moves that aimed
to rejuvenate euro area economy will remain as the key drivers to
shape the rates in the coming months.
85
Capacity Utilization Rate (CUR) in Manufacturing, %
80
75
70
65
CUR, %
Seasonally Adjusted CUR, %
60
55
3
6
9 12
3
2008
2009
6
9 12
3
2009
2010
6
9 12
3
2010
2011
6
9 12
3
2011
2012
6
9 12 1 3
2012
2013
6
9 12 1
2013
2014
Source: CBT
Unemployment
Unemployment rate:
Going down
Compared to one month ago, the unemployment rate eased
down from 9% to 8.8% in May (in May 2013 the unemployment
rate was at 8.2%). Unemployment rate realized as 8% for male
and 10.5% for female. In the same period, non-agricultural unemployment rate realized as 10.7%.
17
Unemployment Rate, %
15
13
11
9
7
Turkey
EA
5
3
6
9
2009
2009
12 3
6
9
2010
12
3
6
9
2011
2011
12
3
61 9
2012
2012
121 3
6
9
2013
2013
121 3
6
9
121
2014
2014
Source: TURKSTAT, OECD, Eurostat
Labour force participation rate (LFPR) realized as 51.2% in May.
LFPR realized as 71.8% for male and 31% for female.
The seasonally adjusted unemployment rate increased from 9.2%
in April to 9.5% in May. As a reminder, in May 2013, the seasonally adjusted unemployment rate was at 8.9%.
9
Inflation
Inflation!
Don’t wanna talk about it
Compared to one month ago, the CPI increased by 0.09% in August, well above the expectations that was in the negative territory. The highest monthly increase was at hotels, cafes and restaurants with 1.64%. The indices rose for food and non-alcoholic
beverages 0.89%, for education 0.75%, for miscellaneous goods
and services 0.65%, for recreation and culture 0.59%.
On the other hand, the highest monthly decrease was at clothing
and footwear at 4.92%. Alcoholic beverages and tobacco followed with 0.46% and transportation followed with 0.06%.
12
The Annual CPI Inflation, %
10
8
6
4
2
0
-2
3
6
9
2008
2009
12
3
6
9
2009
2010
12
3
6
9
2010
2011
Turkey
12
3
6
9
12
3
2011
2012
EA
OECD
6
9
2012
2013
121 3
6
9 121
2013
2014
Source: TURKSTAT, OECD, Eurostat
The annual CPI inflation:
At 9.5% in August
The annual PPI inflation:
At 9.88% in August
With the August data, compared to one month ago, the annual
CPI inflation kept increasing from 9.3% to 9.5%. Among subsectors, on annual basis the highest increases in the index were
for hotels, cafes and restaurants (14.73%), food and nonalcoholic beverages (9.45%), and health (9.08%).
Compared to one month ago, the PPI went up by 0.4% in August.
Consequently, the annual PPI inflation accelerated from 9.46% in
July to 9.88% in August. Among sub-sectors, the highest rates of
monthly increases in PPI were indices for food products (1.59%),
for leather and related products (1.54%). The highest monthly
decrease was at crude petroleum and natural gas (-3.10%) and
other transport equipment (-2.76%).
For me there is no surprise at the core inflation figures. SCA-H
came out as 10.36% and SCA-I came out as 9.68. Both figures
show stiffness at the core inflation which is the bad news. As I
have been writing for months now that the inertial inflation becomes the main problem in fighting with price stability. Unfortunately, it is overlooked. People’s expectations has been deteriorated and hence have to be restored as soon as possible along
with the CBT’s reputation in order to make the inflation figure
come down before the accommodative global economic environment fades away.
10
Foreign Trade Balance
Foreign trade deficit:
Getting better & better
In July, exports and imports were recorded as US$ 13.4 bn (up
by 2.6% y/y) and US$ 19.8 bn (down by 13.5% y/y), respectively.
Hence, the foreign trade deficit registered as US$ 6.4 bn in July,
comparing favorably to the US$ 9.9 bn deficit one year ago and
US$ 7.9 bn deficit one month ago.
With the July data, the year to-date trade deficit came down to
US$ 46.1 bn (compared to the US$ 60.6 deficit same period of
one year ago), while the 12-month sum trade deficit narrowed
down from US$ 93.6 bn one year ago to US$ 85.1 bn.
According to the seasonal and calendar-adjusted series, the foreign trade deficit registered as US$ 6.5 bn in July, comparing favorably both to the US$ 7.5 bn deficit one month ago and to the
US$ 8.6 bn deficit one year ago.
Foreign Trade Performance, US$ bn (12-month sum)
300
Exports
Imports
250
200
150
12-month sum
trade deficit:
US$ 85.1 bn
100
50
0
3
6
9 12 3
2008
2009
6
9 12 3
2009
2010
6
9 12 3
2010
2011
6
9 12 3
2011
2012
6
9 121 3
2012
2013
6
9 121
2013
2014
Source: TURKSTAT
As compared with the same month of the previous year, exports
to the EU-28 increased by 11.1% from US$ 5.4 bn to US$ 6.0 bn.
The proportion of the EU countries was 45% in July 2014, while it
was 41.6% in July 2013.
In July 2014, the main partner country for exports was Germany
with US$ 1.361 bn. Germany was followed by the UK (US$ 0.918
bn), Iraq (US$ 0.590 bn) and Italy (US$ 0.589 bn). In July 2014,
the top country for Turkey’s imports was Russia (US$ 2.152 bn),
followed by China (US$ 1.95 bn), Germany (US$ 1.811 bn) and
USA (US$ 1.276 bn).
Notice that the trade deficit has been narrowing down considerably as a result of more successful export efforts and contracted
imports. Exports coverage imports became 67.5% in July, while it
was 56.9% one year ago. This is good news especially things
surrounding Turkey are moving at the unfavorable direction mostly (worsening situation in Syria an Iraq and their economic burden
on top of political, humanitarian and other effects on Turkey.
11
Current Account Balance
Compared to one month ago, the current account deficit increased from US$ 3.5 bn to US $4.1 bn in June due to the worse
balance on goods.
Current account balance:
Right direction for y/y
With June data, the year-to-date current account deficit registered
as US$ 24.2 bn (compared to the US$ 37.1 bn deficit one year
ago). The 12-month sum current account deficit decelerated further from US$ 52.9 bn in May to US$ 52.2 bn in June.
Current Account Balance, US$ bn (12-month sum)
10
0
-10
-20
-30
-40
-50
-60
-70
-80
-90
3
6
9
12
2008
2009
3
6
9 12
2009
2010
3
6
9 12
2010
2011
3
6
9 12
2011
2012
3
6
9 121 3
2012
2013
6
9 121
2013
2014
Source: CBT
Although the decrease at the current account deficit continues, it
lost its steam a bit as it is point out by the Bulletin in the previous
issues. However, the improvement will continue for a while and
there seems no difficulty in financing it due to the abundant money supply outside seeking a place with higher return and security.
In any case, the current account deficit will stay as a problem for
Turkish economy until the necessary structural reforms will be
implemented successfully.
Fiscal Balance
In the first half of 2014, the central government budget revenues
went up by 10.3% compared to the same period of the last year
by registering TL 210.5 bn. The tax revenues increased by 6.1%,
whereas the other items increased by 30.0% in the same period.
On the other hand, the central government expenses surged by
13.8% to TL 213.9 bn during the first half 2014. Primary and the
interest expenses increased by almost the same rate to TL 187.4
bn and TL 26.5 bn respectively.
Consequently, a budget deficit of TL 3.4 bn and a primary surplus
of TL 23.1 bn were recorded for the first half of 2014, compared
to TL 3.0 bn budget surplus and TL 26.3 bn primary surplus in the
first half of 2013.
12
TL bn
Revenues
Tax
Other
Expenses
Primary
Interest
Budget Balance
Primary Balance
Central Government Budget
Jan-June Jan-June
Change, %
2013
2014
190.9
158.4
32.6
187.9
164.6
23.3
3.0
26.3
210.5
168.1
42.4
213.9
187.4
26.5
-3.4
23.1
10.3
6.1
30.0
13.8
13.8
13.6
-212.5
-12.2
2014
Target
Realization/
Target (%)
403.2
348.4
54.8
436.4
384.4
52.0
-33.3
18.7
52.2
48.3
77.3
49.0
48.7
50.9
10.1
123.2
Source: Ministry of Finance
The Government targets TL 33.3 bn budget deficit and TL 18.7
bn primary surplus in 2014. As of June, the year-to-date primary
surplus equaled 123.2% of the Government’s year-end target. In
line with the primary surplus, budget balance is better than the
target.
Based on the budget performance so far this year, one may say
the Government will end up better figures than the targets, given
the fiscal discipline is maintained in the remainder of the year.
Central Government Debt Stock
Debt stock:
Sliding slowly
According to the latest data posted by the Turkish Treasury, TL
590.2 bn central government debt stock was recorded in July
(down by 0.55% compared to one month ago). Domestic debt
stock (remained almost flat compared to one month ago) was
recorded TL 408.2 bn (69.2%), while remaining TL 181.9 bn
(30.8%) belongs to external debt stock (down by more than US$
3 bn compared to one month ago).
Central Government Debt Stock, TL bn
700
Domestic Debt Stock
External Debt Stock
Total Debt Stock
600
500
400
300
200
100
0
3
6
9 12
2007
2009
3
6
9 12
2008
2010
3
6
9 12
2009
2011
3 6
9
2010
2012
12
3
6
1 9 121
9 12 3,4 3 6
2011
2013
2012
2014
Source: Turkish Treasury
13
In terms of interest type breakdown; TL 378.4 bn (64.12%) of the
total debt stock is with fixed interest rate, TL 107.2 bn (18.16%) is
with floating interest rate, and TL 104.6 bn (17.72%) is indexed to
CPI.
Monetary Policy
In its meeting in August, the Monetary Policy Committee (MPC)
decided not to change the one-week repo auction rate (the policy
rate) keeping it at 8.25%. The Monetary Policy Committee decided to keep the overnight borrowing rate at 7.50%, whereas the
Committee decided to cut the lending rate by 75 basis points to
11.25% from 12.00%.
Decisions of the Monetary Policy Committee
Policy
Rate
Change
Jan 13
5.50
0.00
4.75
%
O/N Borrowing
Change
Rate
O/N Lending
Rate
Change
-0.25
8.75
-0,25
Feb 13
5.50
0.00
4.50
-0.25
8.50
-0,25
Monetary policy:
Mar 13
5.50
0.00
4.50
0.00
7.50
-1,00
Some cut
Dec 13
4.50
0.00
3.50
0.00
7.75
0.00
Enough?
21 Jan 14
4.50
0.00
3.50
0.00
7.75
0.00
28 Jan 14
10.00
+5.50
8.00
+4.50
12.00
+4.25
April 14
10.00
0.00
8.00
0.00
12.00
0.00
May 14
9.50
-0.50
8.00
0.00
12.00
0.00
June 14
8.75
-0.75
8.00
0.00
12.00
0.00
July 14
8.25
-0.50
7.50
-0.50
12.00
0.00
27 August 14
8.25
0.00
7.50
0.00
11.25
-0.75
Source: CBT
According to the Central Bank, loan growth is at reasonable levels as a result of tight monetary policy moves and private final
domestic demand follows a modest course.
“The adverse impact of exchange rate developments since mid2013 on annual inflation is gradually tapering off.” As asked in the
previous issues of the Bulletin: anybody heard inertial inflation?
What about inflation inertia?
“[E]levated food prices continue to delay the improvement in the
inflation outlook. In this respect, the Committee also evaluated
the possible impact of the drought and the geopolitical risks on
the inflation outlook.” Again this might be new for some but it is
not new for you, the loyal readers of the Bulletin as I have kept
telling it for the last few issues. Well, it is more than –few– now.
The Bank continued as “[i]n light of these assessments the Committee decided to maintain the current stance within a more symmetric interest rate corridor.” I was amazed with the giant size
and the skewness of the corridor. A small step is taken by the
Bank towards fixing it.
14
The Bank goes as “[i]nflation expectations, pricing behavior and
other factors that affect inflation will be closely monitored and the
tight monetary policy stance will be maintained, by keeping a flat
yield curve, until there is a significant improvement in the inflation
outlook.” First of all, inertia has become the biggest problem in
fighting with increasing inflation. Although, -pricing behavior–
points to inertial inflation, not many is aware of the problem yet.
Secondly, “a significant improvement in the inflation outlook” is a
statement that needs a definition. If it means decrease in inflation
or at least signs towards that, well I am afraid it does not seem it
is coming soon.
Consumer Confidence Index
Consumer confidence:
A bit down
Compared to one month ago, the consumer confidence index
eased down from 73.9 in July to 73.2 in August. It seems the index stabilized just above 73.
90
Consumer Confidence Index
85
80
75
70
65
60
55
3
6
9
12
2009
2009
3
6
9 12
2010
2010
3
6
9
2011
2011
12
3
6
9 12 3
2012
2012
6
9
2013
2013
12 3
6
9
12
2014
2014
Source: TURKSTAT
The index of general economic situation expectation in the next
12 months increased by 1.5% (from 98.4 in July to 99.8 in August). This shows that number of consumers expected a better
general economic situation in the next 12 months increased compared to the previous month.
In addition, compared to a month ago, the index of financial situation expectation of household in the next 12 months period increased by 0.7%.
Compared to a month ago, the index of probability of saving in
the next 12 months decreased by 5.5% and the index of expectation for the number of unemployed persons in the next 12 months
decreased by 4.2%.
15
Real Sector Confidence Index
Compared to one month ago, the real sector confidence index fell
by 2.2 points to 106.8 in August (the index was 107.5 in August
2013). On the other hand, compared to the previous month, the
seasonally adjusted real sector confidence index is down by 0.3
points to 106.0 in August (the index was 106.7 in August 2013).
Real Sector Confidence Index (RSCI)
130
120
110
100
90
80
70
60
RSCI
SA RSCI
50
3 6 9 12
2009
2009
3 6 9 12
2010
2010
3 6 9 12
2011
2011
3
6 9 12
2012
2012
1
3 6 9 12
2013
2013
1
3 6 9 12
1
2014
2014
Source: CBT
According to the unadjusted series, among sub-indices, compared to one year ago, total amount of orders (current situation),
amount of stocks of finished goods (current situation), export orders (next 3 months), and general business situation increased.
Compared to one month ago, only amount of stocks of finished
goods (current situation) and general business situation indices
increased; while total amount of orders (current situation), volume
of output (next 3 months), total employment (next 3 months), total
amount of orders (past 3 months), export orders (next 3 months)
and fixed investment expenditure indices decreased.
Survey of Expectations
The results of August survey of expectations are mostly in line
with the expectations. Domestic and global developments increased expectations regarding inflation, whereas decreased expectations regarding the current account deficit and the GDP
growth.
Probably the most important one grabbing everybody’s attention
is about the expectations for inflation figures that all of them are
on the rise. The 2014 year-end annual CPI inflation expectation
increased from 8.30% one month ago to 7.70%.
The annual inflation by the end of the next 12 months edged up
from 7.27% in July to 7.35% in August survey.
16
The annual inflation by the end of the 24 months increased from
6.73% one month ago to 6.80%.
Note that the continued rise at all these inflation expectations is
the main problem to tackle. Once again, these results show the
inertial inflation is the point that has to be focused on.
Central Bank Survey of Expectations
Jun 14
Year-End Inflation (%)
8.29
12-Month Ahead Inflation (%)
7.19
24-Month Ahead inflation (%)
6.62
12-Month Ahead One-Week Repo Rate (%)
8.44
Current Year's Current Account Balance (US$ bn)
-50.1
Next Year's Current Account Balance (US$ bn)
-54.8
Current Year Growth Rate (%)
3.3
Next Year Growth Rate (%)
3.9
Year-End US Dollar Exchange Rate
2.17
12-Month Ahead US Dollar Exchange Rate
2.23
Jul 14
8.30
7.27
6.73
8.07
-50.1
-54.9
3.4
3.9
2.17
2.23
Aug 14
8.70
7.35
6.80
8.39
-49.5
-54.1
3.3
3.8
2.19
2.26
Source: CBT
Regarding external balances, the current account deficit forecast
for this year was revised from US$ 50.1 bn in July to US$ 49.5 bn
in August, while the current account deficit for the next year was
estimated as US$ 54.1 bn (after the US$ 54.9 bn deficit estimate
in the previous month).
On the growth front, the GDP growth rate expectation for the current year decreased from 3.4% to 3.3%, while the GDP growth
rate expectation for the next year fell from 3.9% to 3.8%.
Year-end US$ TL exchange On the exchange rate front, market players forecasted the yearend and 12-month ahead US Dollar rates as 2.19 and 2.26, rerate expectation:
spectively. Considering the 2015 general elections, the FX rates
2.19!!!
could be under pressure during the election period. However, as
the past shows there might be correction at the rates after the
election.
17
RECAP OF EU & US MACRO DATA
Gross Domestic Product
According to the second estimates published by Eurostat, the
GDP remained stable in the euro area and increased by 0.2% in
the EU28 in Q2 2014 compared to the preceding quarter. In 1Q
2014, the GDP for Euro area had increased by 0.2% and it had
increased by 0.3% for EU28.
On year-on-year basis, the GDP grew by 0.7% in the euro area
and 1.2% in the EU28, after recording a 1.0% and 1.4% increases in the first quarter.
US economy:
GDP up by 4.2% in 2Q
According to the second estimates for 2Q 2014, the GDP in the
US increased at an annual rate of 4.2% (the advance estimate
was 4.0%). Recall that in the previous quarter, the GDP contracted by 2.1% according to the revised numbers. This upturn in the
percent change in real GDP primarily reflected upturns in exports
and in private inventory investment, accelerations in personal
consumption expenditures and in nonresidential fixed investment,
and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration
in imports.
Industrial Production
EU industrial production:
Down in June
Compared to the previous month, the seasonally adjusted industrial production (excluding construction) decreased by 0.3% in
euro area and 0.1% in the EU28 in June, after dropping 1.1%
both in the euro area and in the EU28 in May.
Compared to the previous year, industrial production (excluding
construction) did not change in the euro area and increased by
0.7% in the EU28 in June.
EU & US Industrial Production Index (y/y change,%)
12
8
4
0
-4
-8
-12
-16
-20
-24
3
6
9 12
3
2008
2009
6
9 12
2009
2010
3
6
9
2010
2011
EA
12
3
6
9
2011
2012
EU28
12
3
6
9
2012
2013
12 1 3
6
9 12 1
2013
2014
US
Source: Fed, Eurostat
18
On a monthly basis, Ireland (-16.5%), the Netherlands (-3.0%)
and Lithuania (-2.7%) had the largest decrease in the member
states whereas Malta (+5.2%), Denmark (+2.4%) and Hungary
(+1.8%) had the highest increase.
On a yearly basis, Hungary (+11.3%), Romania (+9.9%) and Slovakia (+7.5%) had the largest decrease in the member states
whereas Greece (-6.9%), Malta (-3.8%) and Latvia (-2.0%) had
the highest increase.
US industrial production:
Up
Compared to the prior month, the seasonally adjusted industrial
production index in the US increased by 0.4% in July, after having 0.4% (revised from 0.2%) increase in June.
On a yearly basis, the seasonally adjusted industrial production
index was up by 5.0% in July, after having 4.3% increase in the
previous month.
Unemployment
EU unemployment rate:
Stable
Compared to one month ago, in July, the seasonally adjusted unemployment rate remained stable both in the euro area and in the
EU28. i.e. no change in the euro area at 11.5% and in the EU28
at 10.2%. Compared to one year ago; however, the unemployment rate decreased in both zones (down from 11.9% in the euro
area in July 2013 and 10.9% in the EU28 in July 2013). Eurostat
estimates that 24.850 million people in the EU28, of whom
18.409 million were in the euro area, were unemployed in July
2014.
Germany and Austria (both 4.9%) are among the states having
lowest unemployment rates whereas Greece (27.2% in May
2014) and Spain (24.5%) are the ones with the highest unemployment level.
EU & US Unemployment Rate, %
14
12
10
8
6
EA
EU28
US
4
3
6
9 12 3
2008
2009
6
9 12 3
2009
2010
6
9
12 3
2010
2011
6
9
2011
2012
12 3
6
9
2012
2013
121 3
6
9 121
2013
2014
Source: US Bureau of Labor Statistics, Eurostat
19
US unemployment rate:
At 6.1%
In the US, compared to one month ago, the seasonally adjusted
unemployment rate went down from 6.2% to 6.1% in August,
comparing favorably to one year ago when the unemployment
rate was at 7.2%.
Recall that the unemployment rate is a significant factor in monetary policy decisions in the US. Unemployment rates in six percentages is a success after hitting 10% in 2009.
Inflation
In July, the monthly CPI inflation was -0.7% in the euro area and 0.5% in the EU28.
The EU annual inflation:
0.8% in July
On annual basis, the CPI inflation in July came out as 0.4% in the
euro area and 0.6% in the EU28. Recall that in July 2013 the annual inflation was 1.6% in euro area and 1.7% in the EU28.
EU & US Annual CPI Inflation, %
5
4
3
2
1
-1
-2
-3
3
6
9
2008
2009
12
3
6
9 12
2009
2010
3
6
9
12
3
2010
2011
EA
6
9
12
2011
2012
EU28
3
6
9
2012
2013
12 1 3
6
9 12
1
2013
2014
US
Source: US Bureau of Labor Statistics, Eurostat
Bulgaria (-1.1%), Greece (-0.8%) and Portugal (-0.7%) are the
countries with the lowest annual inflation whereas Austria (1.7%),
Romania (1.5%) and Luxembourg (1.2%) are the ones with the
highest annual inflation in July 2014.
The largest upward impacts to euro area annual inflation came
from restaurants & cafés (+0.08 percentage points –pp), rents
(+0.06 pp) and maintenance of vehicles (+0.05 pp), while fruit (0.13 pp), vegetables and telecommunications (both -0.11 pp) had
the biggest downward impacts.
According to the flash estimate issued by Eurostat, the annual
CPI inflation in the euro area is expected to be 0.3% in August
(after 0.4% in July).
20
According to the seasonally adjusted series, in July, the monthly
CPI inflation registered as 0.1% in the US.
The US annual inflation:
2% in July
On annual basis, the US CPI inflation increased by 2% in July,
that is a notch below its level in June, 2.1%. The index for all
items except food and energy has risen 1.9% annually in July.
The index for all items less food and energy rose 1.9 percent over
the last 12 months, the same figure as for the 12 months ending
June. The energy index has increased 2.6 percent, and the food
index has risen 2.5 percent over the same period.
Foreign Trade Balance
EU trade balance in May:
Surplus
In June, according to the non-seasonally adjusted time series, a
foreign trade surplus of EUR 16.8 bn was recorded in the euro
area (after EUR 15.4 bn surplus in May) and a foreign trade surplus of EUR 2.9 bn was recorded in the EU28 (after EUR 0.5 bn
surplus in May).
EU Foreign Trade Balance, EUR bn
28
20
12
4
-4
-12
-20
-28
-36
3
6
9
12
2008
2009
3
6
9
2009
2010
12
3
6
9
2010
2011
EA
12 3
6
9
2011
2012
EU28
12
3
6
9
2012
2013
12 1 3
6
9
12 1
2013
2014
Source: Eurostat
To recall, in June 2013, the foreign trade surplus registered as
EUR 15.7 bn in the euro area whereas the foreign trade surplus
was EUR 8.6 bn in the EU28.
According to the first estimates by Eurostat, during January-May
2014 the deficit for energy narrowed down from EUR 156.6 in
January-May 2013 to EUR 145.4 and manufactured goods surplus shrank from EUR 111.1 bn to EUR 101.6 bn.
US trade balance in July:
Down a bit
In the US, compared to one month ago, the seasonally adjusted
foreign trade deficit edged down from US$ 40.8 bn to US$ 40.5
bn in July.
21
To recall, the foreign trade deficit registered as US$ 39.4 bn in
July 2013.
US Foreign Trade Balance,SA,US$ bn
-25
-35
-45
-55
3
6
9 12
2008
2009
3
6
9 12
3
6
2009
2010
9
2010
2011
12
3
6
9
12
3
2011
2012
6
9
12 1 3
2012
2013
6
9 12 1
2013
2014
Source: US Bureau of Economic Analysis
Current Account Balance
EA current account:
EUR 54.5 bn surplus in 2Q
The euro area seasonally adjusted current account surplus came
in at EUR 54.5 bn in the second quarter of 2014 (2.2% of GDP)
compared to EUR 55.6 bn surplus in the first quarter of 2014
(2.3% of GDP). To recall in 2Q 2013, the current account surplus
was EUR 61.8 bn (2.6% of GDP).
In the 2Q 2014, compared with the 1Q 2014, based on seasonally adjusted data, the surplus of the goods shrank to EUR 40.3 bn
compared with EUR 46.9 bn, while the surplus of the services
grew from EUR 25.9 bn to EUR 31.6 bn. The surplus of the income account edged down from EUR 13.5 bn to EUR 12.5 bn,
and the current transfers deficit was registered as EUR 29.9 bn
compared to EUR 30.6 bn.
EA Current Account Balance
100
3,0
2,5
80
2,0
60
1,5
40
1,0
20
0,5
0,0
0
-0,5
-20
-1,0
-40
Current Account Balance/GDP, % - RHS
Current Account Balance, EUR bn - LHS
-60
-1,5
-2,0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2009
2010
2011
2012
2013
2014
Source: Eurostat
22
EU current account:
EUR 12.0 bn surplus in 2Q
The EU28 current account surplus registered as EUR 12.0 bn in
2Q 2014 (0.4% of GDP), compared to the EUR 25.2 bn surplus in
1Q 2014 (0.8% of GDP). Note that, the current account surplus of
the EU28 was EUR 47.5 bn in the 2Q 2013.
EU28 Current Account Balance
60
1,5
40
1,0
20
0,5
0
0,0
-20
-0,5
-40
-1,0
-60
-1,5
Current Account Balance/GDP, % - RHS
-80
-2,0
Current Account Balance, EUR bn - LHS
-100
-2,5
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2009
2010
2011
2012
2013
2014
Source: ECB, Eurostat
At the US side, there is no new data release yet. To recall, the
current-account deficit increased to US$111.2 bn (preliminary) in
the first quarter of 2014 from US$87.3 bn (revised) in the fourth
quarter of 2013. The deficit increased to 2.6 percent of currentdollar GDP from 2.0% in the fourth quarter.
Consumer Confidence Index
In August, the consumer confidence index decreased in both the
euro area (from –8.4 in July to -10.0) and the EU28 (from –5.5 in
July to –6.4). To recall, in August 2013, the consumer confidence
index registered as –15.5 in the euro area and –12.7 in the EU28.
EU & Euro Area Consumer Confidence Index
0
Euro Area
-4
EU
-8
-12
-16
-20
-24
-28
-32
-36
3
6
9
2008
2009
121 3
6
9
2009
2010
121 3
6
9 12 1 3
2010
2011
6
9
2011
2012
12 1 3
6
9 12 1 3
2012
2013
6
9 121
2013
2014
Source: Economic and Financial Affairs of the European Commission
23
In the US, following the revised July reading of 90.3 (revised
down from 90.9), the Conference Board’s Consumer Confidence
Index increased by 2.1 points to 92.4 in August. As a reminder, in
August 2013, the consumer confidence index was at 81.8.
US Consumer Confidence Index
100
90
80
US consumer confidence:
Check the graph
70
60
50
40
30
20
3 6
9
2008
2009
121 3
6
9
121 3
2009
2010
6
9
2010
2011
121 3
6
9
2011
2012
121 3
6
9
2012
2013
121 3
6
9
121
2013
2014
Source: The US Conference Board
According to the Conference Board, “[c]onsumers’ appraisal of
current conditions continued to improve through August. Those
saying business conditions are “good” edged up to 23.9 percent
from 23.3 percent, while those claiming business conditions are
‘bad’ declined to 21.5 percent from 22.8 percent. Consumers’ assessment of the job market was also more positive. Those stating
jobs are ‘plentiful’ increased to 18.2 percent from 15.6 percent,
while those claiming jobs are ‘hard to get’ declined marginally to
30.6 percent from 30.9 percent.”
24
TURKISH MARKETS REVIEW
Stock Market
BIST-100:
Ended August at 80,313
The BIST-100 recorded a minimum of 76,692 and a maximum of
82,094, and closed the month of August at 80,313 (down by
2.17% compared to the end of July). The BIST-100 went up by
20.96% compared to a year earlier. Turkish stocks were highly
sensitive to the domestic and global economic, financial and political developments during August.
95.000
BIST-100 Performance
91.000
87.000
83.000
79.000
75.000
71.000
67.000
63.000
59.000
55.000
51.000
47.000
Source: Borsa Istanbul
In the stock market, volatility was at level we get used to. I say –
get used to– because this and that major(!) happening is not major at Turkish market players’ measure anymore.
The range of change was from –3.17% to 2.5% in August whereas it was –2.45% to 1.83% in July.
Among 21 trading days, 13 days we saw decrease at the index
while 8 days we had increase at the index.
Although the political uncertainty about who is going to be the first
elected President and the resulting issue of who is going to be
the next Prime Minister faded away, it did not help much to BIST100 index as Fed’s moves and European Central Bank’s decisions together with problems in Syria and Iraq dominated most of
the month.
In addition, markets were expecting another interest rate cut from
the CBT that did not materialize in reality. The CBT made a twist
by just cutting the upper bound of the interest rate corridor a bit in
order to make everybody happy without effecting the balance of
the economy in their mind. The result is an expected one: nobody
is happy.
25
Bonds and Bills Market
Benchmark:
Ended August at 9.07%
In the month of August, the benchmark bond yield fluctuated between a minimum of 8.74% and a maximum of 9.51%, closing the
month at 9.07%. The yield rose by 6.1% compared to the end of
July.
In August, the Central Bank of Turkey (CBT) cut O/N lending interest rate from 12.0% to 11.25% while leaving O/N borrowing
interest rate at 7.5% and one week repo rate –the policy rate at
8.25%. Hence, the CBT narrowed down the interest rate corridor
from 4 percentage points to 3.75 percentage points by cutting it
from the upper bound in an effort to have more symmetric interest
rate corridor.
So far, the benchmark bond interest rate hovers above the policy
rate but inside the interest rate corridor. The market conditions
seems keeping the benchmark rate relatively high. This creates
reluctance at the CBT side towards cutting the policy rate or moving the corridor down the scale.
Rates and Inflation!!!
Considering the increasing, at least stiff inflation rate just below
two digit figures, the CBT’s current position is a difficult one.
Though, one should remember the past moves of CBT that eroded its reputation, hence, created inertia in inflation. As this is the
case, it is difficult for the benchmark bond rate to come down significantly in the short term without inflation comes down significantly or at least gives signs toward that direction.
Recall the governor Erdem Başçı’s words: “once bitten, twice
shy.” This might be more suitable for consumers’/ market players’ phycology rather than a central bank’s way of thinking.
Hence, inflation inertia is a natural result.
Interest Rates, %
14,0
14,0
12,0
12,0
10,0
10,0
8,0
8,0
6,0
6,0
4,0
4,0
2,0
2,0
Benchmark Bond Interest Rate
O/N Borrowing Interest Rate
1 Week Repo Rate
O/N Lending Interest Rate
Source: Borsa Istanbul, CBT
26
Exchange Rates
TL depreciating
According to the Central Bank exchange rates, the Turkish Lira
against the US Dollar (buying rate) fluctuated between 2.1263
and 2.1776, closing the month at 2.1619 in August. Compared to
the end of July, the Turkish Lira depreciated by 3.35% against US
Dollar.
2,50
2,40
US$ TL Exchange Rate
2,30
2,20
2,10
2,00
1,90
1,80
1,70
1,60
1,50
1,40
Source: CBT
The CBT’s Euro buying rate was traded between a minimum of
2.8448 and a maximum of 2.9036. Compared to the end of July,
the Turkish Lira depreciated by 1.40% against the Euro.
2,90
2,80
EUR & US $ Basket
2,70
2,60
2,50
2,40
2,30
2,20
2,10
2,00
1,90
1,80
1,70
Source: CBT
Compared to the end of July, the TL depreciated by 2.23%
against the Euro & US Dollar basket (where both currencies are
equally weighted), closing the month at 2.5074.
27
Real Effective Exchange Rates
The CPI based real effective exchange rate registered as 109.3
in August (down by 0.6 points m/m), while the PPI based real effective exchange rate came in at 107.2 (up by 0.2 points m/m).
Compared to one year ago, the CPI based real effective exchange rate was down by 2.5 points, whereas the PPI based real
effective exchange rate was down by 1.1 points in August.
The August figures indicate that the CPI based real effective exchange rates is just by the border of the comfortable zone defined
by the CBT. (i.e. between 110 to 120) However, PPI based index
is a bit below the lower bound of the comfortable zone. Recall
that, an increase/decrease in the real effective exchange rates
represents an appreciation/depreciation in the TL in real terms,
denoting a rise/decline in the value of Turkish commodities in
terms of foreign commodities.
Real Effective Exchange Rates
135
130
CPI Based Real Effective Exchange Rate
PPI Based Real Effective Exchange Rate
125
120
115
110
105
100
2009
3
6
9
2009
12 2010
3 6
9
2010
12 2011
3 6
9
2011
12 2012
3 6
9
2012
12 2013
3 6
9
2013
12 20143
6
9 12
2014
Source: CBT
28
SPECIAL TOPICS
 The Best may not be the
THE BEST MAY NOT BE THE BEST
Best
INNOVATION TOWARDS CREATING SELLABLE PRODUCTS
Innovation towards
Creating Sellable
Products
Right metrics are said to be the key for successful companies towards creating innovations. Of course, defining a company’s goal
is the most important element of success. This topic is discussed
at the article “Why Companies Fail? The Boiling Frog Syndrome”
that appeared in June 2014 issue of the Economic Bulletin. One
can articulate the idea in a concise way: the best may not be the
best. The article’s idea can be generalized to producing sellable
products, innovation direction and sustainability of firms. In other
words choices made define a company’s direction and its innovation policy, hence its products/services; probably the whole industry or creation of a new industry or shaping the whole society.
Think about a new design of a jet or the way we board airplanes
or introduction of Centrino technology by Intel some eleven years
ago. One can extend this list. The bottom line in all these examples is the best may not the one that seems so. Let me explain it
by going over the examples one by one.
The first one is the Intel Centrino technology that enabled laptops to start replacing desktop computers. For desktop computers
one of the central issue was to achieve more speed with each
new chip set. The power usage was not in the radar. However,
power usage was a big issue for laptop to have a bigger footprint
in the market. There were two solutions to the problem: either invent a batteries to store more power or invent a new chip set that
uses less power. The latter was what Intel did. With Centrino
technology by sacrificing from speed a bit, Intel achieved big
power saving, hence longer battery life. That led laptop to start
getting more market share. The idea was simple enough: cut the
speed of the chip set from its best in order to have much lower
power consumption.
According to a benchmarking study done by Mobile Mark at the
time, Intel Centrino mobile technology-based systems can deliver
up to five hours of battery life or more, compared to about four
hours on mobile Intel Pentium III processor-M-based system and
about 3 hours on mobile Intel Pentium 4 processor-M-based systems. Such a choice increased consumer satisfaction from laptops, gave way to mobile platforms, and can be considered as
very early steps of today’s tablet era. Although the goal and the
best seemed achieving top speed available for a chip set, Intel
redefined its strategy as a sellable product that creates higher
consumer satisfaction with a speed a little below possible top
speed that decreases power consumption a lot.
The second example comes from MIT: a new aircraft design decreasing fuel consumption which is the biggest cost item in air
transportation. The new design is called “double bubble aircraft
design.”1 The "double bubble" super-efficient and clean airliner
1
. For more information see http://web.mit.edu/aeroastro/news/magazine/aeroastro7/n-3.html or http://www.gizmag.com/mit-doublebubble-green-aircraft/15142/
29
concept designed by an MIT-led team, was presented with Popular Mechanic's "Breakthrough Award" in 2010.
Image: MIT/Aurora Flight, www.gizmag.com
Aerodynamic structure and engine design and replacement decide fuel consumption of an airplane. There are some physical
restrictions like size of wingspan. At higher speeds wingspan has
to be smaller. However, longer wings decrease drag and boost
efficiency. Among other design innovations in their project, the
important one for the purposes of this article is the reduced cruising speed that enables a longer wingspan. Longer wingspan
means more efficient fuel consumption. Similar to the Intel Centrino example, by sacrificing from possible top speed, much more
fuel efficiency is achieved.
Boarding to an airplane takes time and it is a boring process for
passengers. Have you considered why people who will sit at the
back of an airplane are boarded first and people who will sit in the
front seats are boarded last? Yes, boarding is the third example.
Some may say that is the fastest way, some may say it is the
most efficient way in terms of minimizing time considering satisfaction levels (will be clear in a bit), some even may say it makes
no sense at all, it is just a custom, no one care to change it.
There might be a number of ways for boarding passenger to a
plane.
The first one the usual one that is almost standard across airlines
today; boarding starts from the back of plane and then middle of
the plane and then the front rows. You walk down the aisle for
your seat by the window. Hold on! There is somebody sitting by
the aisle in your row. You stop. Put your bag to the overhead bin.
She get up in order to let you to reach your window seat. You
know what everybody in the aisle is waiting for this process to be
completed. Lots of time passes.
30
Another method can be letting people to board randomly. Passengers randomly start to enter their plane, just walk down the
aisle, find their assigned seat and put their bags in the overhead
bin and sit. Hold on! Yes hold on. People wait in the aisle again
for you to put your bag to the overhead bin and to sit. Again time
passes.
Third method can be letting passengers to sit starting from outside going inside. i.e. window seats first then aisle seats, outsidein. That might create less hassle in the aisle. An improvement
over the first two methods. However, you are travelling with your
spouse, or grandmother or small child who needs help.
Would you be unhappy if you cannot be with her all times? Maybe more efficient but less consumer friendly right?
The fourth one is the Southwest Airlines method: no order in
boarding and no seat number. (Southwest Airlines is a US low
cost airlines) You go in the plane and sit wherever you want. Of
course, if it is not taken by someone else.
This method eliminates some if not all waiting in the aisle as if
someone in front of you blocked the aisle, you may just sit to the
row in front of you instead of waiting. However, if you are travelling with your spouse and if there are no two empty seats next to
each other available, would you be unhappy? Would you be willing to sit separately, you sitting at the back, your spouse in the
front of the plane? Would you?
Comparison of the four methods is given by J. Stromberg in his
article “the way we board airplanes makes absolutely no sense”
at www.vox.com. As seen in the graph, the standard method is
the worst among four, whereas Southwest style is the most time
efficient one.
Boarding Times
30
25
24.48
20
17.25
15
14.92
14.32
Outside-in
Southwest
10
5
0
Standard
Random
Boarding Times, minutes
Reproduction of the graph from the cited J. Stromberg article at www.vox.com
31
The question is: is the Southwest method the best one? The answer is no. The algorithm developed by physicist Jason Steffen
produces the best result. It is called Steffen method. It is similar
to outside-in method but with further complexity. Details of the
method are beyond our purposes here. However, the idea is that
more complex but more time efficient. Its complexity prevents it to
be feasible.
Sit tight!
The question comes.
Which method would you prefer among those five?
There is a tradeoff between complexity of the method, passenger
satisfaction (sitting together etc.) and time spent for the whole
process.
All these examples show that the best may not be the best. It is
not that one size fits all. In all, sacrifice in one parameter to make
huge gains in another hence get overall better products/services.
Rather than focusing on one issue or parameter, needs and goals
have to be defined, and parameters to achieve those have to be
decided. Innovations have to be done in that direction, not aimlessly.
Rasim ÖZCAN
CEO Advisor
Türk Telekom
32
CALENDAR FOR TURKEY
MONDAY
TUESDAY
WEDNESDAY
THURSDAY
FRIDAY
September 1
September 2
September 3
September 4
September 5
* Household Consumption
Expenditures, 2013
* CPI
* Real Effective Exchange Rate,
* PPI
August
* Labour Cost Index, 2Q
Treasury Cash Realizations, August
* House Price Index, June
September 8
* Industrial Production Index, July
September 10
September 9
* Retail Sales Volume Index, July
* GDP, 2Q
September 11
* Balance of Payments Stats., July
September 12
* Foreign Trade Indices, July
* Industrial Turnover Index, July
September 15
* Household Labour Force, June
* Registered Unemployed, August
* Job Vacancies, August
September 16
* Construction Turnover & Production
September 17
* Short Term External Debt Stats., July
Indices, 2Q
September 18
* International Investment Position, July
* Road Motor Vehicles, July
* Outstanding Loans Received from
* Income and Living Conditions
September 23
* Animal Production Stats., Jan.-June
Survey, 2013
* Non-Domestic PPI, August
Balance, July-August
September 29
September 30
* Consumer Conf. Index, Sept.
* Foreign Trade Stats., August
* International Reserves and Foreign
* Monthly Money & Bank. Stats, August
Currency Liquidity, August
September 24
September 25
* Sectoral Confidence Indices, Sept.
* House Sale Stats., August
* Business Tendency Survey, Sept.
* No. Of Arriving - Departing Visitors
Foreigners and Citizens, August
* Natural Gas Stats., August
* Central Gov. Budget Primary
* Labour Stats., 2013
* Credit Card Exp. Stats., August
* General Gov. Debt Stock, 2Q
* Consumer Loan Stats., August
* Turkey's External Debt Stocks, 2Q
* Public Debt Stock, 2Q
Characteristics, 2013
* Patent Stats., August
* Trademark Stats., August
* Capacity Utilization Rate, Sept.
* Central Gov. Debt Stats., August
* External Trade Stats by Enterprise
* Rest of the World Accounts, 2013
Abroad by Private Sector, July
September 22
September 19
September 26
* Renewable Energy Sources - Stats.
of Bio Ethanol Fuel, 2Q
GLOBAL CALENDAR
MONDAY
TUESDAY
WEDNESDAY
THURSDAY
FRIDAY
September 1
September 2
September 3
September 4
September 5
€ Building Permits
€ Indistrial Producer Prices
€ Service Turnover
€ Indust. Import Prices
€ GDP, 2Q
$ ISM Manufacturing
€ Retail Sales
$ ADP National Employ. Report
€ Quarterly Balance of Payments, 2Q
$ Construction
$ Beige Book
$ Initial Claims
$ Employment Situation
$ Trade Balance
$ ISM Non-Manufacturing
September 8
$ Survey of Cons. Expectations
$ Consumer Credit
September 10
September 9
$ Job Openings and Labor
Turnover Survey
€ Longterm Gov. Bond Yield
€ Key Indicators for the euro area
September 11
$ Initial Claims
$ Wholesale Trade
September 12
€ Industrial Production
€ Employment, 2Q
$ Michigan Inflation Expect. (P)
$ Michigan Cons. Sentiment (P)
$ Business Inventories
$ Imports/Exports
September 15
September 16
September 17
September 18
September 19
€ International Trade in Goods
€ Labor Cost Index
€ Inflation (HICP)
$ Philly Fed Survey
€ Euro Area Balance of Payments
$ Industrial Production
€ Job Vacancy
€ Production in Construction
$ Initial Claims
$ Composite Indexes
$ Capacity Utilization
$ PPI
$ CPI
$ New Residential Construction
$ Atlanta Fed Buss. Infl. Expect.
$ Empire State Manufact. Survey
$ Business Leaders Survey
$ Real Earnings
September 22
€ Flash Consumer Conf. Indicator
September 23
$ Richmond Fed Survey
$ Chicago Fed Naitonal Activity
Index
$ NAR Existing Home Sales
September 29
September 30
€ Buss. Consumer Survey
€ Flash Estimate EA Inflation
€ Buss. Climate Indicator for the EA
€ Unemployment
$ Personal Income
$ Chicago Purch. Managers Index
$ PCE Deflator
$ Consumer Confidence
$ Pending Home Sales
$ Dallas Fed - Texas Retail Outlook
$ Dallas Fed Manufact. Survey
$ US, € EU
Survey
September 24
$ New Residential Sales
Survey
September 25
September 26
$ Initial Claims
$ GDP
$ Advance Durable Goods
$ Michigan Inflation Expect. (F)
$ Revised Building Permits
$ Michigan Cons. Sentiment (F)
[This page is intentionally left blank]
Assoc. Prof. Rasim ÖZCAN
CEO Advisor
[email protected]
TÜRK TELEKOM
Akatlar Mah.
Prof. Dr. Kaya Çilingiroğlu Cad. No. 10
34335 Etiler Beşiktaş
Istanbul/Turkey
Capital Markets and Investor Relations
[email protected]
www.ttinvestorrelations.com
Tel: +90 (212) 309 96 30
Fax: +90 (212) 352 96 10
Download

September 2014 - Türk Telekom Investor Relations