In the conference held in cooperation with Borsa İstanbul, Turkish Exporters Assembly (TIM) informed exporters concerning advantages of funding via capital markets and protection against currency risks. In “Funding Alternatives via Capital Markets and Currency Risk Management” conference, TIM President Mehmet Büyükekşi Borsa İstanbul General Director/CEO Tuncay Dinç and Borsa İstanbul experts, PETKİM, TEB and Çuhadaroğlu Metal Industry managers shared their experiences with exporters.
TIM President Büyükekşi and Borsa İstanbul CEO Dinç opened their speeches by condemning terrorist attacks took place in Ankara yesterday. Büyükekşi reminded famous scientist Einstein's words “There is no human without a mistake. An individual's degree of humanity should be measured by his effort and meticulousness to accept and fix his mistakes. Seeing a mistake clearly sets an individual into motion, a person can only stand up when he notices having fallen down “. Stating that “The biggest mistake is to be aware of being at fault but not trying to fix it. With such a fluctuation of exchange rates around the world, almost half of our exporters still have not taken an action to protect themselves. They do not hedge exchange rate risk” Büyükekşi told they needed to inform exporters for this reason and they will inform all companies by preparing a report on this subject.
Exporters do not have a well record of hedging
Expressing that 41% of exporters have not taken any action to be protected from exchange rate in the questionnaires performed by TIM, Büyükekşi told “Briefly, our exporters do not have a well record of hedging”. Resembling the world to a global village, Büyükekşi stated if exporters keep doing nothing, they will be exposed risks. Büyükekşi:
“Our export loss only because of parity effect was 12,6 billion dollars last year.
If we had been able to keep even 20% of this loss, let alone all of it, we would have brought in billions of dollars to our country. Therefore, hedging the risks bears utmost importance. We have three ways to prevent this fragility. The first is to get insured through banks. However, these transactions have high costs. The second is forex transactions that we frequently see on advertisements. However, a great amount of these transactions are used for speculation. The third way is Derivatives Stock Market, DSM in short. Our companies can protect themselves against exchange rate risk with these methods.”
Cash flow is like a disease confining to bed
Reminding that there are 2.7 million KOBI's in Turkey and their debt is almost 391 million liras, Borsa İstanbul General Manager/CEO Tuncay Dinç asked “Companies have cash flow and exchange rate risks. A company might not make profit but these problems might be solved in certain amounts of time. However, cash flow is like a disease confining someone to bed. Is it possible to sustain growth basing on loan?”
Tuncay Dinç emphasized that indebtedness rate gradually increases and this affects growth rate of KOBI's therefore they attach importance to public offering. Dinç told “If you are willing to have a healthy growth, it is essential to institutionalize. If you increase professionalism in the company, you will extend its life as well. I highly recommend this. You can receive support from our experts. Derivatives stock market is a good implementation for your risk of exchange rate. Otherwise, you will not be able to manage possible foreign currency fluctuations and have problems.”