Turkey Is the Big Winner Following the Crisis in Ukraine

[Holac]

 

Turkey Is the Big Winner Following the Crisis in Ukraine

 

Russia’s annexation of the Crimean Peninsula and the possibility of further action taken in Ukraine and other former Soviet Bloc nations have led many investors to wonder, understandably so, what impact the crisis has had on investment opportunities in Eastern Europe. To unravel these concerns and more, U.S. Global’s Director of Research John Derrick caught up with Gavin Graham of VoiceAmerica’s “Emerging and Frontier Markets Investing” program.

 

Below you can read some of the interview highlights, in which John speculates on who were the winners and losers in the aftermath of the Russia-Ukraine conflict. He also touches briefly on the violence that has recently erupted in Iraqi Kurdistan and what effect it might have on neighboring Turkey.

 

Which European countries have the greatest potential and have benefited the most from what’s been happening?

 

I think Poland’s been a beneficiary. It’s used as a safe haven in the region: stable economy, stable political environment. It’s benefited from the European recovery and doesn’t have that much trade with Russia.

 

I think Turkey has benefited, more from a money flow standpoint. If you were worried about what was going on in Russia and some of the longer-term implications, I think money flowed into places like Turkey. Money also flowed into places like Greece because a lot of the international investors tend to be regional investors, and within that region, there are shift allocations into places like Turkey, which has been a very strong performer this year. Part of that money is coming out of Russia.

 

That’s a very fair point because, as you say, if you’re running a dedicated Eastern European fund, Russia’s been overwhelmingly the largest weight within it, though a fair number of people were underweight even before Crimea because of concerns about governance and the like. Nonetheless, where are you going to go? Turkey is obviously a major market. Some of the reasons you like it include the demographics as well as the government’s pro-business attitude.

 

Exactly. If you just take a step back and look at the long-term secular growth, the demographics are very positive. There’s an entrepreneurial culture in Turkey: good government policies generally speaking toward business development, toward foreign investors. Basically business can get done, businesses can be created, and all those kinds of things that most Americans can relate to.

 

It’s still an emerging market country, and they’ll do things that you’ll look at and scratch your head, like banning Twitter or Facebook. But the political situation has definitely calmed down, and so I think the long-term secular story for Turkey is probably the best long-term secular story in the region. That’s what you want to hitch your wagon to over the long run.

 

 

 

Read more: http://www.usfunds.com/investor-library/frank-talk/turkey-is-the-big-winner-following-the-crisis-in-ukraine/#.U6MSFYWa8vU#ixzz3BBblkmbI

[Alpha Blondy]

i've been warning against Turkey's expansionist foreign policy since 2009. this fervent neo-ottomanism agenda is somewhat worrying. we've yet to see it reach it's potential. turkish language classes are $15 per hour here in the nation's capital.