Turkey’s stock market is the top performer of 2022

Name one company on the Turkish stock exchange. Can’t? That might be why your portfolio wasn’t up triple digits in 2022.

The iShares MSCI Turkey ETF (NASDAQ:TUR), which tracks an index of 54 Turkish public companies — was up a massive 105% in 2022.

The main Turkish index, BIST 100, is up even more with an impressive 205% return.

2022 was a strong year for the Turkish economy — benefiting from its close Russian ties.

• Total exports increased by 13% to $254B.
• Exports to Russia doubled to $1.3B.

But Turkey wasn’t always such a hot economy. For years, international investors have pulled away due to high inflation, declining Lira currency and unconventional economic policies.

This has created a cost of living problem among Turkish citizens — with inflation soaring as high as 85.5% in 2022.

But there’s an upside to having a weak currency. It makes your country’s goods cheaper for other economies.

• While other economies were busy raising rates, Turkey decreased theirs from 13% to 9% in 2022.
• To hedge against inflation, Turkish investors parked their money in the Turkish stock market instead of holding their rapidly declining currency.

JPMorgan has some words for the Turkish government — calling their economic policies “unsustainable” and likely to worsen inflation (FT).