Name one company on the Turkish stock exchange. Can’t? That might be why your portfolio wasn’t up triple digits in 2022.
The iShares MSCI Turkey ETF (NASDAQ:TUR), which tracks an index of 54 Turkish public companies — was up a massive 105% in 2022.
The main Turkish index, BIST 100, is up even more with an impressive 205% return.
2022 was a strong year for the Turkish economy — benefiting from its close Russian ties.
- Total exports increased by 13% to $254B.
- Exports to Russia doubled to $1.3B.
But Turkey wasn’t always such a hot economy. For years, international investors have pulled away due to high inflation, declining Lira currency and unconventional economic policies.
This has created a cost of living problem among Turkish citizens — with inflation soaring as high as 85.5% in 2022.
But there’s an upside to having a weak currency. It makes your country’s goods cheaper for other economies.
- While other economies were busy raising rates, Turkey decreased theirs from 13% to 9% in 2022.
- To hedge against inflation, Turkish investors parked their money in the Turkish stock market instead of holding their rapidly declining currency.
JPMorgan has some words for the Turkish government — calling their economic policies “unsustainable” and likely to worsen inflation (FT).
