Greetings from Turkey, which feels like it is on the other side of the world from Egypt in terms of recent headlines. This is a place that wields as much power in the Middle East as any country right now.
Much like Egypt, Turkey has over 80 million people and a demographics story as exciting as any country on earth: 65% of the population is under 15 years old.
The economy in here dwarfs that of Egypt: $958 billion GDP in Turkey versus $250 billion GDP in Egypt.
Global investors are playing strong domestic growth and a solid banking system here. I had meetings today with some of the biggest banks in Turkey who are giving guidance of loan growth between 20-30% in 2011.
Despite some falling net interest margins, these banks are still profitable in a rising interest rate environment.
The macro picture is the big overhang for Turkey right now. Even in the face of a major pullback in the market, rates need to go higher and the Central Bank of Turkey needs to reign in the current account deficit.
Once the market feels this is under control, it’s off to the races again.
If you can wade through this potential volatility, do not be too cute in your entrance point. The ETF TUR is an easy play for exposure in the banks.
Look to TKC for growth in the emerging consumer mobile phone sector.
This is a world-class country with high-end management and a government that is managing to balance a complicated ethnic mix.