The president puts his political opponents on trial. A civil war next door in Syria destabilizes the region, creating refugees and birthing the ISIS terrorist movement. And the country is feuding with long-time ally America.
But stock investors look at Turkey and think: “What’s not to like?’’ The country’s BIST 100 index is up 37 percent this year, one of the world’s best performances.
Analysts who study Turkey can’t fathom the enthusiasm.
True, the government has juiced the economy with easy credit. And an April referendum, which increased
President Recep Tayyip Erdogan’s power, has provided stability after a July 2016 coup attempt provoked a government crackdown and raised tensions with Washington.
“Markets are more interested in stability than (the) shift toward authoritarianism,’’ says Onur Bulbul, president of the InnoNative Advisors consultancy.
Some investors aren’t sold. The Turkish currency, the lira, is still down 18 percent against the U.S. dollar since the July 15, 2016 coup. And foreigners are balking at long-term bets: Foreign direct investment in Turkey, which includes acquisitions and new factories, dropped 30 percent last year.