Investors are panicking out of the iShares MSCI Turkey ETF (TUR) after a coup plot was discovered.
According to various sources, including the BBC and the Canadian Press, prosecutors interrogated 51 Turkish Military commanders on Tuesday about alleged plans to destabilize the country by blowing up mosques and provoking Greece into shooting down a Turkish plane over the Aegean Sea in order to trigger a coup and topple the government. This event brought up memories of the forced resignation of the Turkish Prime Minister in 1997, the fourth overthrow or forced resignation since 1960, and left investors to wonder how far the emerging market has really progressed and whether EU membership is attainable at any point in the near future.
Here’s the drop:
Great, but A) this is an emerging market and coup plots are pretty common and shouldn’t scare people, and more importantly B) in reference to the past political events mentioned above, let’s ask ourselves a simple question — did the Turkish economy grow since 1960, and more recently since 1997? Of course.
We’re not saying anything is guaranteed here, but it’s at least worth an investigation because the ETF is now well off its recent ~$60 high and in the long-term, Turkey’s economy is likely to keep growing regardless of its current political tumult.
Just be aware that this ETF has had a great run over the last year, so timing is probably key. True contrarians will hope for even more coup-related panic.
The author does not own shares in TUR.