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Over the last decade, the construction sector has transformed the skyline of Istanbul and other cities, renewed and extended Turkey’s transport infrastructure, and built new communities and facilities from the Aegean to the Caucasus. Construction employs tens of thousands directly and has also established a range of related industries— such as construction machinery, building materials, engineering and architecture. With the domestic market providing a strong base, and with Turkish contractors having successfully diversified their markets and projects in recent years, the construction sector is well positioned to continue growing. From residential to retail property, the real estate market has also flourished in the last few years. With strong fundamentals in terms of population and income growth, the market should be able to maintain its expansion in the years ahead. This chapter contains a dialogue with Ergil Ersü, Chairman, Gama Holding, and Orhan Paçacı, Member of the Executive Committee and Shareholder, Mesa Holding, and an interview with Emin Sazak, CEO, Yüksel İnşaat, and former President, Turkish Contractors Association.

Given its reliance on energy imports and the economy’s recent slowdown, Turkey has benefitted from the sharp decline in oil prices in late 2014 and early 2015. The country has boosted energy supplies to support future economic growth, while seeking to reduce its energy dependence. In addition, a long-running dream to become an energy hub is starting to become a reality. Significant investment from the private sector and an increase in renewable in its power-generation mix can help the government meet the ever-rising demand for power. Finding new sources of oil and gas, including domestic ones, while expanding its burgeoning role as an energy transit hub are central to its strategy. This chapter contains an interview with Besim Şişman, CEO and Chairman of the Board, Turkish Petroleum.

Turkey’s industrial sector includes a wide variety of manufacturers, primary producers and traders, responsible between them for a sizeable share of the country’s GDP. Steel, chemicals, pharmaceuticals, electrical and electronic equipment, building materials, cars, jewellery and clothing are all major export earners and magnets for international investors. All have benefitted from – and, indeed, driven – much of the country’s recent economic growth, with goods bearing the “Made in Turkey” label now more prevalent than ever in world markets. With the size of the retail market widely expected to double over the next decade, Turkey represents a major opportunity for retailers. Yet recent years have seen big internationals pulling out or downsizing their involvement, and as the pace of economic growth slows, consumer confidence is weakening and some challenges do remain. For foreign investors, the lesson would appear to be that retail businesses still need a strong dose of local knowledge. Good geographical positioning and local partnerships may therefore be the way forward. This chapter contains interviews with Bora Yalınay, CFO, Ülker; Sadettin Korkut, General Manager, Petkim Petrokimya Holding; and Muharrem Dörtkaşlı, CEO, Turkish Aerospace Industries.

While the global insurance industry saw growth slow over the course of 2013 and 2014, Turkey’s insurance sector displayed resilience, making the country an attractive market for investment and expansion. Despite fluctuations in other sectors and a depreciation of the local currency, in real terms Turkey’s insurance sector experienced significant growth in both the life and non-life segments. Overall, the expectation is of continued premium growth in 2015, with companies also taking greater control of their technical results, boosting profitability. Pensions will likely continue seeing positive growth as well, although potential uncertainties may impact consumers negatively in the period up to elections in 2015. In addition, the diversity of products on offer is set to expand. This chapter contains interviews with Mehmet Bostan, General Manager, Vakıf Emeklilik, and M Uğur Erkan, CEO, Anadolu Hayat Emeklilik.

Turkey’s stock exchange, Borsa Istanbul (BIST), had a bumper year in 2014. It was the fifth-best-performing exchange globally, with the BIST 100 index rising by 26% and closing at a record year-end high. While the early months of 2015 were more muted, the appeal of the exchange and many of its listed stocks to investors is still strong. Turkey’s equity and bond markets felt the impact of cooling investor sentiment and the related fall in the lira in the first few months of 2015. A degree of uncertainty over the fiscal and monetary policy outlook ahead of the election had an effect as well. However, the reforms of the past few years have left the country’s capital markets larger, more liquid, more accessible to foreign capital and all together better-off. Tough as some periods may be, the market’s future is founded on that of its economy, and in this regard Turkey’s large, young populace and diverse economic base are major assets. This chapter contains interviews with Vahdettin Ertaş, Chairman, Capital Markets Board, and İbrahim Turhan, Former Chairman and CEO, Borsa Istanbul.

Turkey’s banking sector has proved resilient in the face of both the global economic crisis and more recent fluctuations in the economy. Loan growth remains fairly high by developed-market standards but has fallen in recent years, reflecting the market’s increasing maturity as well as regulatory moves to contain credit expansion with an eye on risk profiles. In the medium to long term, the market should benefit from the large population, the scope for growth in a country with moderate levels of banking penetration and the expansion of a diversified economy. The outlook for the longer term remains positive. Turkey is one of the world’s largest emerging economies and has a sizeable and growing population and a diversified economic base. The continued entry of new players to the market is indicative of the sector’s potential. This chapter contains interviews with Erdem Başçı, Governor, Central Bank of the Republic of Turkey; Ali Fuat Taşkesenlioğlu, CEO, Halkbank; Suat İnce, Deputy Chief Executive, Türkiye İş Bankası; and Hikmet Ersek, President and CEO, Western Union.