Tactical Bull View on Turkey ETF

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This idea is suitable for someone who is looking to find value in emerging markets.

On March 27, the cost of borrowing Turkish Lira overnight soared past 1000% as local banks were pressurised to not provide liquidity to foreign fund managers seeking to bet against the Lira. As a result, the Turkish equity markets experienced a massive selloff. The BlackRock Turkey ETF (TUR) slumped 9% last week. Though the economy has been struggling with high double-digit consumer-price inflation, unemployment, an ailing currency and political uncertainty, we believe that these headwinds have been priced into equity valuations currently.

BlackRock Turkey ETF (TUR)’s P/E Ratio has slid to 5.8, with the 12 month trailing yield at roughly 4% and it looks a good ‘Buy’ at these levels. Growth is highly likely to turn positive in late 2019 as major economic data looks promising – strong energy consumption, increasing car registrations, robust exports, tourism and tax revenue along with a large percentage of working age individuals.

Summary: Buy Turkey ETF (TUR)/ Sell Puts on TUR

Please reach out to advisors@kristal.ai for further details/queries – Kristal.AI Advisory Desk.


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