Page 51 - TURKRptFeb20

TURKEY INSIGHT: How long can the Turkey ETF rally last? The Borsa Istanbul has been breaking consecutive records and the most popular Turkey exchange-traded fund (ETF), the (TUR), is on a roll. Discussion centre on when the correction to the rally will come.
The TUR, Nasdaq-listed and USD-denominated, was up 8% y/y to 29.2 as of January 17 after posting a 14% annual return to end-2019 at 27.1. That’s a sharp recovery from the 20s in May 2019 and the 22s in October, but it’s still dramatically below the historical high of 79 seen in 2010.
The Berlin-listed iShares MSCI Turkey ETF (ISVZ) was up 12% y/y to 26.36 on January 21 while the Mexico-listed MXN-denominated iShares MSCI Turkey ETF (TUR) was up 12% y/y to 546 as of January 16.
TUR, the only ETF that offers pure exposure to the Borsa Istanbul, replicates the MSCI Turkey IMI 25/50 Index, which covers around 99% of the free float-adjusted market capitalisation on the Istanbul stock exchange.
It has 42 constituents. Garanti BBVA has the highest weight, at 10.47% as of January 17, followed by Akbank (9.35%), BIM (7.73%) and Koc Holding (5.79%).
The London-listed GBP-denominated HSBC MSCI Turkey UCITS ETF (HTRY) was up 5% y/y to 205 on January 21 while the Xetra-listed EUR-denominated HSBC MSCI Turkey UCITS ETF (H4ZK) was up 8% y/y to 2.42 and the Paris-listed HSBC MSCI Turkey UCITS ETF (HTR) was up 8% y/y to 2.41.
The HSBC MSCI Turkey UCITS ETF replicates MSCI Turkey Index (MITR00000PTR).
Garanti BBVA has the highest weight, at 14.69%, in HSBC’s Turkey ETF, followed by Akbank (13.19%), BIM (10.88%) and Turkcell (8.3%).
Mainstream view . Analyses in the mainstream media point to Turkey’s series of aggressive policy rate cuts, a “decent inflation outlook”, a “rebound in GDP” and relatively cheaper valuations in attempting to explain the latest Borsa Istanbul surge.
When the stock exchange falls on the near horizon, expect the same commentators to explain the descent by referring to local factors such as Turkey’s newly negative real rates, geopolitical tensions and so forth. The truth could be rather uglier and wider-ranging. Shuddering in fact. But, as always, holders of Turkish stocks have bought based only on their own decisions. As they’ve not bought based on macro fundamentals, they’re not looking to sell
51 TURKEY Country Report OUTLOOK 2020 www.intellinews.com