Turkish stocks and the related exchange traded fund stumbled Tuesday on concerns the political situation there is deteriorating as some call for the prime minister’s resignation.
The Borsa Instabul 100 Index fell the most since Dec. 25 as opposition leaders called for Prime Minister Recep Tayyip Erdogan’s resignation over a leaked tape where he allegedly talked about hidden funds, Bloomberg reports.
“Either you take a helicopter and flee abroad or resign,” Kemal Kilicdaroglu, head of the Republican People’s Party, told his lawmakers in parliament.
The recording could lead to a “disastrous earthquake capable of annihilating the political establishment that has successfully run the country for 12 years,” Toronto-Dominion Bank senior emerging-markets strategist Cristian Maggio said in a note.
Turkish stocks have weakened since Dec. 17 when a group of businessmen and others were were taken into custody during a probe into gold smuggling, money laundering and bribery in government tenders. [Corruption Charges Ruffle Turkey ETF]
Adding to the pressure on Turkey’s investments, the lira currency has declined over 1% since the tape was revealed yesterday. The currency is down 8% since the corruption investigation started at the end of last year. The depreciating currency further lowered returns for U.S. investors once converted back into their stronger U.S. dollar.
iShares MSCI Turkey ETF
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