Turkey’s (TUR) ETF is up over 9% today as investors place a risky bet that the political situation will calm down.
Top judges meet this week to discuss a petition to close down the governing party just hours after a bomb killed 17 people, adding to the uncertainty paralyzing investors considering investing in the country.
The attack was the worst in Turkey since 2003 and caused widespread apprehension. Tensions are high because of chasm between the religiously conservative governing Justice and Development party (AKP) and the secular-leaning establishment. Earlier this month three gunmen and three policemen were killed in an OK corral like shoot-out at the gates of the U.S. consulate in Istanbul.
According to IBD, most of the stocks trade on the Istanbul Stock Exchange and weigh heavily in health care, financials and materials. The ETF has jumped more than 20% since early May despite the country's political uncertainty.
The market is trading at just over seven times earnings but economic growth has slowed considerably.