Investing in Turkey: Out come the Bears
By Ian Cooper
As of 2 p.m. ET, Wednesday, we had conflicting reports of Turkey’s commitment of several thousand troops into northern Iraq to combat the Kurds. While a site said that 50,000 had been deployed, the Foreign Ministry and the General Staff in Ankara denied the reports, calling them “disinformation.”
“Disinformation” may be an understatement considering that Turkey’s parliament, in recess ahead of July 22, 2007 elections, would have had to authorize any action in Iraq. Unfortunately, news of the incursion may have been from a loose-lipped media awash in high speculation and “hopes” of incursion validity. Heck, it’d give them new story ideas for their daily reports. If I hear about another house full of cats again, I’ll scream.
Seeing that any political moves or military actions in the region are quickly felt by global markets, we watched shares of the Turkish Investment Fund (TKF) and Turkcell (TKC), both down 4% and 2%, respectively on the news, as Turkish markets sold off on the misleading headlines.
There are two ways to play this situation. Validity of a military move will serve as a near-term negative for TKF and TKC. TKC has options. However, should it be determined that the news was false, TKC and TKF are likely to rebound.
Take Care,
Ian L. Cooper
Early Alert Trader
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