Turkey

Capital markets in Turkey got smacked hard due to worries about the coming presidential election.

Stocks opened 8% lower but finished 4% lower. The lira fell over 2% against the US dollar and debt yields went up dramatically.

Things like this come up every now and then with emerging markets. I am a huge fan of the space but they have had a great run over the last couple of years and for about the last year I have been urging moderation and have occasionally cut back exposure.

Longer term the story in Turkey is very compelling. The population is very young (average age in the early 20’s) and large (close to 70 million). Growth is good, the country is on the road to EU ascension (admittedly a very long road) and they benefit from a new oil pipeline.

This is a country that I think will become more important on the world stage but it will be a bumpy ride.

I have traded the Turkish Investment Fund (TKF) in the past but have no plans to revisit it soon. iShares has filed for a Turkish ETF.

You can click here and here for the articles I read about today’s action in Turkey.

3 Comments

  1. Investors took a Turkish bath as they got the stuffing knocked out of them. It’s holding on by a wing and a prayer. Giving Thanks I’m out of the EM’s.

    Reloaded stage two DXD, SDS, SKF, QID. Apogee IMHO. (Thanks to Fidelity I have 6 months free trades, just in case.)

    Reply
  2. Turkei is #1! Ataturk #1!

    I like Turkey, but beware: there’s culture of ripping off the foreign investor there. Not saying it’s going to happen to you, mind you. A good company for Turkey is that conglomerate Koc …Forbes has some good lists on Emerging Markets.
    For example, checking out Turkey (which has superior demographics to
    Thailand, is about the same size as Thailand in people and GNP, but
    has worse public finances, 64% public debt to GNP compared to 44% for
    Thailand, so inflation and currency devaluation are the wild cards),
    we find a company called Koc, a conglomerate (a good way to invest in
    a country is through a conglomerate IMO, like in Korea), and founded
    by a guy 80 years ago on a shoestring. Click on the name of Koc and
    you get the symbol (KCHOL) and Google this and you get their website
    and annual report (see below). Koc is nice because it has
    partnerships with Ford and Fiat and does vans, cars and tractors too–
    Turkey is a big country and you need motor vehicles to get around.
    Plus a lot of farmer freds still farm there (33% of the country is
    still farmers) so tractors should sell well. I personally am
    impressed by the country, having once visited, except for the politics
    and government populism (same story everywhere). If they get into the
    EU it will help the efficient companies (presumeably Koc is one of
    them, they are positive about EU membership in their annual report).
    Also the government is getting more ‘private’ says Koc’s annual
    report, privatizing more in the last 3 years than the previous 20
    years.

    Reply

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Turkey

Capital markets in Turkey got smacked hard due to worries about the coming presidential election.

Stocks opened 8% lower but finished 4% lower. The lira fell over 2% against the US dollar and debt yields went up dramatically.

Things like this come up every now and then with emerging markets. I am a huge fan of the space but they have had a great run over the last couple of years and for about the last year I have been urging moderation and have occasionally cut back exposure.

Longer term the story in Turkey is very compelling. The population is very young (average age in the early 20’s) and large (close to 70 million). Growth is good, the country is on the road to EU ascension (admittedly a very long road) and they benefit from a new oil pipeline.

This is a country that I think will become more important on the world stage but it will be a bumpy ride.

I have traded the Turkish Investment Fund (TKF) in the past but have no plans to revisit it soon. iShares has filed for a Turkish ETF.

You can click here and here for the articles I read about today’s action in Turkey.

Submit a Comment

Your email address will not be published.

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