Two massive twin earthquakes (magnitude 7.7 - 7.4, 2 aftershocks with magnitude 6+) have shaken southern Türkiye and Syria.
It was one of the worst earthquakes in Haiti since 2010. The sad statistics: over 50,000 people have already lost their lives. There could be many more, as well as the number of people made homeless. International aid has started. Türkiye has declared a three-month state of emergency in the areas affected by the earthquake.
Apart from the great human tragedy, the economic impact is also likely to be significant. The affected area generated an economic output of about 9% in terms of gross domestic product. Some listed steel and cement companies operate production facilities in the area. There is no news of massive damage yet, but the loss of infrastructure, power grids alone, is evident.
„The tragedy is enormous. But after every natural disaster comes reconstruction.“
Alexandre Dimitrov, Fund manager ERSTE STOCK ISTANBUL
The total economic impact is difficult to estimate at the moment, as Alexander Dimitrov, fund manager of ERSTE STOCK ISTANBUL, points out. Some analysts already estimate that public spending on reconstruction could amount to 5-5.5 % of GDP. (Source: Bloomberg News). As a result, budget deficits will increase in the coming years due to higher public spending on reconstruction.
Türkiye Key economic indicators (Consensus)
Source: Bloomberg
The impact on the national currency, the lira, which has been severely weakened in recent years, and on economic development will depend on reconstruction measures, international aid, investments and the outcome of the presidential elections in May. This will mainly involve local Turkish companies. Türkiye has already issued $2.75 billion worth of Eurobonds this January and received some inflows from the United Arab Emirates, Saudi Arabia and Qatar.
We are in constant contact with our colleagues in Türkiye to obtain information about the companies that are directly affected. ERSTE STOCK ISTANBUL has no investments in some listed cement, raw materials and textile producers (SASA, ISDMR Steel, Cimsa, AKCNS, among others) that operate production facilities in the affected areas. Among utilities, the fund is only weighted in Enerjisa (a joint venture of Sabanci and EON) with approx.1%. The portfolio also does not include holdings in insurance companies and state-controlled banks that could be financially affected by the immediate consequences.
We are all very concerned and as soon as there is news or changes, we will communicate this information to our investors.
Donate for the earthquake victims now
Join Neighbours in Need's fundraising to support millions of people affected by the devastating earthquake in the border region between Türkiye and Syria.
Your contribution to this fundraising will make a difference! Please donate to the following account:
- Name: Nachbar in Not
- IBAN: AT75 2011 1400 4004 4001
- BIC: GIBAATWWXXX
- Reference: Erdbebenopfer Türkei und Syrien
Disclaimer
This document is an advertisement. Please refer to the prospectus of the UCITS or to the Information for Investors pursuant to Art 21 AIFMG of the alternative investment fund and the Key Information Document before making any final investment decisions. Unless indicated otherwise, source: Erste Asset Management GmbH. Our languages of communication are German and English.
The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to Art 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to Art 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the website www.erste-am.com within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the website www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.
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