How To Buy Into Turkey's Record Export Growth

Includes: CEW, TKC, TUR
by: Mary Daniel

Turkey hit export growth records for 2011. The country now has one of the highest growth rates in the world. Exports increased a record 18.2 percent reaching $134.6 billion. Still, the government expects output to be half next year as the eurozone crisis continues to take hold. Turkey is currently the world’s 17th largest economy. Still, with record trade and an ever-growing economy, Turkey’s lira is poised for investment. There is no ETF directly tied to Turkey’s currency. However, the WisdomTree Dreyfus Emerging Currency ETF (NYSEARCA:CEW) does provide exposure to the lira. The iShares MSCI Turkey Invest Market Index ETF (NYSEARCA:TUR) provides direct exposure to Turkey mainly through financial services holdings.

As trade continues to grow in Turkey, so will the need for communications. Turkcell (NYSE:TKC) is Turkey’s largest mobile phone provider. On Tuesday, shares of TKC moved above their moving average. This movement provides short-term investors a chance for a long position. Turkcell is still trading closer to its 52 week low. The company does have a potential upside and according to analysts should hit a price target of $13.06. Recently Turkcell has announced partnerships with large companies as well as extended client bases. The company should see a significant growth in 2012. Turkcell is also the first Turkish company to be listed on a US stock exchange.

And the country is expected to continue its record growth. Analysts expect trade volume in between Turkey and the United Arab Emirates to increase to $10 billion by 2015. Turkey is also described as a hot spot for both residential and commercial real estate investment. Realtors are seeing an increase for vacation and holiday homes in this now popular luxury getaway. Turkey is also considered one of the top emerging markets to invest in. Turkey is also considered to be a neutral country as far as cultural perspectives and ties. Most Western nations do not tie it into the Middle East or Muslim equation.

At a time when many investors are looking for anything other than Europe in which to invest, emerging markets are in a prime position to grow. Turkey is a market well primed for growth. Recent policy changes from Turkey, such as the combining of two large exchanges, are only making foreign direct investment in this nation easier. Turkey has the cash reserves and financial positions to expand and take advantage of Europe’s declining economic standing. Yet Turkey is close enough geographically and politically to Europe to play off of its perceived strengths. Moderate-risk ETFs such as CEW and TUR are ideal for hedging your bets outside of Europe at this difficult economic time.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.