Turkish ETFs, which offer exposure to Turkish stocks, have attracted more than $ 90 million in new money since the end of October. This result is surprising given the difficult economic situation in which Turkey finds itself, marked by the fall of its local currency (Lira or TRY), high inflation, rising borrowing costs and, consequently, an increase payment defaults.
The turmoil resulted in a decline in performance of the range of ETFs, including iShares MSCI Turkey ETF? ARCX: TUR (-27% in USD), iShares MSCI Turkey UCITS ETF? ITKY (-17% in USD), Lyxor MSCI Turkey UCITS ETF? MTAA: TUR (-20% in EUR), HSBC MSCI Turkey UCITS ETF? HTR (-21% in EUR) and Finans Asset Management Dow Jones Istanbul 20 Equity Intensive ETF? DJIST (-22% in EUR), with most of the fall attributed to foreign exchange losses.
The market recently stirred after the central bank’s intervention in currency markets failed to stem the fall of the Turkish lira. The Borsa Istanbul 100 Index, Turkey’s benchmark, has lost 20% (in TRY) since last Thursday after gaining 54% in 2021 (January 4, 2021 to December 16, 2021).
It can be assumed that the positive entries could indicate that investors are buying securities on the downside with the expectation of an economic recovery before the general and presidential elections of 2023.
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