Turkish move to ditch winter time casts shadow on trade, stock market
ISTANBUL - Reuters
REUTERS photoTurkey’s plan to stick with summer time all year round may have some unforeseen costs - increasing the time difference with European trading partners and crimping exports and domestic equity trading.
Prime Minister Binali Yıldırım said last month clocks would no longer go back an hour for winter, permanently putting Turkey three hours ahead of Greenwich Mean Time (GMT) in winter as well as summer.
The government expects the move to save up to 2.5 billion Turkish Liras ($805 million) in electricity consumption - by adding more daylight to the end of the working day - or roughly 8 percent of
the electricity that would be consumed during the five-month period.
But it is not without cost, narrowing the window each day when Turkish businesses can interact with their biggest trading partner, the European Union.
Turkey first adopted summer time, also known as daylight saving time, in 1940, following the example of Europe. Today the system is used across the 28-nation European Union.
Russia attempted a switch to permanent summer time in 2011 under President Dmitry Medvedev, who argued it would improve the well-being of his countrymen. That was scrapped after Vladimir Putin returned to the Kremlin in 2012 and Russia moved to permanent winter time. In Turkey, some of the biggest objections come from exporters. Turkey’s textile producers garner more than three quarters of their $16 billion in annual sales from Europe.
“The time difference with one of the most important trade partners, the United Kingdom, will go up to 3 hours. Taking into account the lunch break, it means we’re only going to do business with them in the afternoon,” said Şeref Fayat, chairman of the Turkish Clothing Manufacturers’ Association (TGSD).
“To continue our communication with them, we will have to ask our employees to do overtime, which will increase our labor costs,” Fayat said.
It may also complicate Turkey’s long-standing aim to transform Istanbul into a financial hub. The time change will mean that for five months of the year, equity trading time in Istanbul will not overlap at all with U.S. stock markets.
“One of the conditions of becoming a financial hub is being on the same time zone with other major hubs,” said İlhami Koç, chairman of the Turkish Capital Markets Association (TSPB).
“Now that our time difference is increasing, it will have negative repercussions for our plan to become a hub.”
The government has already made regulatory changes to make Istanbul more attractive for foreign capital, and foreign investors own around 60 percent of the free float on the bourse. But analysts have long said there is a mismatch between the size of Turkey’s economy and its relatively small capital markets.