Dear members,
Events unfolding as we had foreseen in 2008-2009, provoked one of the severest economic depressions experienced in world history. A crisis that led even to the collapse of some of the world’s strongest banks, had widespread repercussions on many different levels and although the effects may have differed from country to country, the overall outcome was widespread and deep recession.
According to International Monetary Fund (IMF) projections, the world economy shrank 0.8% in 2009 while among the developed countries the contraction was a much more severe 3.2%. The financial system crisis and ensuing recession, drove unemployment levels to unprecedented heights while the volume of world trade dropped significantly and public finance and budget deficit issues confronted everyone as the leading items on their agendas.
The developments which I have so briefly summarized above inevitably affected our own country as well. After having registered 27 consecutive quarters of uninterrupted real growth, the Turkish economy embarked upon a process of sharp contraction in 2009 in which exports declined and unemployment rose and in which the real sector languished in general but small and medium-sized businesses suffered the most of all. In 2009, there is a shrinkage by 4.7% in Turkish economy.
Throughout 2009 our most fundamental objective was to shield our members from the destructive effects of the economic crisis.
Under the extraordinarily difficult market conditions that prevailed in 2009, OYAK fulfilled all of its basic functions. Never deviating from its basic principles and strategies, OYAK successfully added TRY 1,187 million in net actuarial profits to its members’ savings.
The Company’s rate of return, which is regarded as the most crucial benchmark of the fundamental success of all the investment and portfolio management activities that we undertake for the sake of our members’ futures and continued affluence, was 14.2% in 2009. This rate of return, which was achieved under the extremely adverse conditions that prevailed in 2009 and which once again generated real yields on OYAK members’ savings, was 2.2 times the posted rate of consumer price index (6.53%) and 2.4 times the posted rate of producer price index (5.93%) in 2009.
These financial results once again revealed the strength of OYAK’s ability to secure real returns on its investments as well as the validity of its underlying policies as a company. It also demonstrated that its performance was sound, sustainable, and capable of creating value even under the most difficult of market conditions.
Anticipating the approaching global economic crisis and foreseeing the multidimensional ramifications of its impact, OYAK began taking measures and implementing a number of strategic decisions as early as 2007. OYAK’s strategy was shaped around the underlying tenet that it should be a “safe harbor” for its members’ assets. With this in mind, the company chose to adhere to a cautious approach as the crisis process unfolded.
Our long-term responsibility towards our members is to manage both their assets and the investments that we undertake on their behalf in the most careful way possible. During 2009 our basic approach therefore focused on making absolutely the best use possible of opportunities presented by money and capital markets in order to offset the adverse impact that the economic downturn would inevitably have on our equity participations’ business volumes and therefore on their profitability. It gives me pleasure to state here that OYAK in 2009 achieved all of the budget targets set for it at its previous general meeting.
Both liquidity and portfolio management were once again our priorities in 2009. In keeping with our strategy of making the best possible use of any opportunities that may present themselves, we also continued to keep a close watch on market developments and conditions.
Believing that correct timing is a matter of key importance when investing, OYAK will be carefully monitoring strategically important business lines in international markets, with particular attention to be given to mineral extraction. As the restoration of global economic balances proceeds, a process which we anticipate will yet take some time, OYAK is determined to actively keep its eye on opportunities and take advantage of them.
Shaping OYAK of the future…
As an organization with one of the highest levels of liquid resources in Turkey, we have the strength to continue overcoming any difficulties that markets may generate. In addition to our commitment to continuously building upon their entitlements, we also provide our broad community of members with a variety of high-quality service as well. These services, which range from loans to home ownership financing, position OYAK as an exemplary pension fund. OYAK has achieved and will always maintain both a structure and an actuarial balance capable of serving its immediate, medium and long-term objectives.
We foresee that 2010 is going to be yet another year full of surprises and difficulties and we have prepared ourselves accordingly. The current global and national economic outlooks are such as to dictate that we be conservative in identifying our targets and that we be even more pragmatic than ever.
We continue to take such measures as are needed to make it possible for us both to increase our productivity and effectiveness in keeping pace with the world’s harsh realities and to keep our cost base under control. In line with this, we are planning to make changes in OYAK’s organizational structure and also in its equity participations portfolio. We shall be taking a number of steps in this direction in 2010.
Under the heading of organizational structure, Nihat Karadağ and Dinç Kızıldemir joined the OYAK management team as assistant general managers (executive vice presidents) in 2009. I welcome both of these new colleagues and wish them the very best of success in their new positions while also expressing my complete conviction that they will be playing important roles in the construction of OYAK’s sustainable future.
In 2011 OYAK will proudly complete its 50th year of service. In many respects however, it has already begun redefining its course in line with its broader world view. In its second half-century, OYAK will continue to accommodate itself to the dictates of change and to keep pace with innovations both in Turkey and around the world. While always keeping its attentions focused on the happiness of its members, OYAK will go on undertaking investments that are as beneficial for them as they are for the whole country. Member relationships that evolve from and are reinforced by the principle of “partnership for life” provide OYAK with its most important source of energy and strength. During the toughest years that have been seen since 1930s, the confidence and unstinting support of our members are what will make it possible for us to maintain OYAK’s actuarial balance and to go on delivering real returns.
In closing, I offer my appreciation to our members, to our Board of Directors, to our Executive Committee, and to our Board of Auditors while also expressing my thanks to our management team and employees for transforming our goals into reality.
