Turkey invests in weapons exports, earnings season reveals resilience and Hollywood in limbo
July 2023
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RAMPING UP ARMS SALES
Following President Recep Tayyip Erdoğan’s re-election in May, Turkey has made a grand return to the global stage and front pages.
Governments in Ankara are used to balancing geopolitical interests due to the country’s strategic location. However, most analysts agree that Erdoğan possesses a unique talent for negotiating with the US, EU, Arab Gulf states, Russia and China.
As his third term gets underway, Erdoğan is renewing focus on selling military hardware. A defence trade fair held in Istanbul this month demonstrated Turkey’s growing clout as a weapons producer. The goal is for arms exports to climb to US$6 billion in 2023 - up from US$4.4 billion last year.
According to the Stockholm International Peace Research Institute, a respected security think tank, Turkey counts Hungary, Poland, Azerbaijan, Mali, Niger, Qatar and Bangladesh among its buyers.
Unmanned aerial vehicles (UAV), or drones, are the most popular item on the order list, particularly those made by Baykar Technology. The powerful Bayraktar TB2 drone, with its precision air-strike capabilities, was even praised for helping Ukrainian forces on the ground. [Worth noting: Baykar’s chief technology officer happens to be Erdoğan’s son-in-law.]
And the deals keep flowing. During the Turkish leader’s recent tour of the Gulf, Saudi Arabia’s defence ministry signed two drone acquisition contracts - a financial and diplomatic win. It’s further proof that Ankara’s policy of channelling resources and domestic investment to the defence industry is reaping rewards.
COMPANY TEMPERATURE CHECK
The onslaught of company statements means we’re in the thick of earnings season. Stubborn inflation and rising interest rates have dominated the business news cycle; however, the number crunching reveals a decidedly less gloomy picture.
Here’s a snapshot of the corporate landscape:
Unilever, whose brands include Dove, Vaseline and Ben & Jerry’s, reported sales figures that beat estimates. A series of price hikes to offset material costs have yet to seriously dent volumes.
A surge in contactless payments and travel spending have lifted Visa and Mastercard’s bottom lines. Their CEOs struck an optimistic note.
Stronger local competition in China hurt Volkswagen’s vehicle deliveries in the country. Even though the German auto giant sold millions of cars worldwide, its executives are keen to engineer a rebound in China by staying ahead of EV trends.
Despite impressive profit growth, Meta’s metaverse and virtual/augmented reality division, Reality Labs, continues to register enormous losses. Still, investors are betting on Mark Zuckerberg’s portfolio of social media apps and “year of efficiency”.
Booming demand for luxury leather bags saw second quarter revenue at Hermès soar to US$3.65 billion. The US market has emerged as a bright spot - stores in Los Angeles and New York “outperformed” expectations.
Consumers are eating more burgers, nuggets and fries at McDonald’s restaurants. Global same-store sales jumped nearly 12% in the April-to-June period. Hundreds of new branches of the Golden Arches are set to open in the coming months.
UNITING ON THE PICKET LINES
After a spate of dismal box office scores, Hollywood cheered the ‘Barbenheimer’ bonanza. Greta Gerwig’s subversive film on the Mattel doll raked in US$155 million over opening weekend in North America, while Christoper Nolan’s biopic on J. Robert Oppenheimer grossed US$80.5 million.
But the celebrations have been bittersweet. The cast of Oppenheimer abruptly left the movie’s London premiere when the Screen Actors Guild (SAG) strike was announced on 14 July. Tensions in Los Angeles are running high. Similar to the striking writers, working actors are anxious about the ramifications of AI technology and reduced income from streaming services.
This piece by CNN explains the cause and impact of the labour dispute.
Thanks for reading! Take care and stay curious, Sara x