Turkish Incursions Into Iraq Hurt US-Listed Turkish Shares (TKF, TKC)

Some military and political moves affect entire global markets and some moves are limited to certain regions.  If you just look at headlines and saw "Turkish Tropps Launch Offensive Into Iraq" you would worry that major Middle East tension and conflict was heating back up.  If you know the history of Kurdish Iraq, the Kurdish area of Turkey, and the efforts for Kurds to break away from Turkey then this is just another messy day at the geopolitical office meeting the financiers.

There are reports of Turkish armed forces strikes across the Iraqi borders and itdepends all upon which sources you read.  Some say YES and some say NO.  Yahoo! notes that troops have entered and are chasing guerillas that use staging bases there.

The armed fighting between Kurdish separatists and Turkish forces is more than 20 years old, and it is a mult-generations’-old issue.  The Kurds want their own nation and Turkey isn’t exactly too fond of giving back land it will lose rights and control over.  You can understand both sides of the argument.

There are very few live direct plays for US investors to play the Turkish stock market here in the US, but there are two:  The Turkish Investment Fund (TKF-NYSE) and Turkcell Iletisim Hizmetleri AS (TKC-NYSE).

TKF is trading down 4.1% at $17.25 today.  TKC is trading down 2.2% at $16.06 today.

You might be able to blame this on the two days of weak trading in the US markets, and you might be able to blame the perceived geopolitical risks.  The Turkish markets measured by the ISE National 100 Index and the ISE National 30 were down 1.27% and 1.35% respectively.  Energy traders are of course watching this because of the headline risks, but if the history would indicate that this is a retalitory strike.  If you can start a sentence with "just" it is probably "just" another messy day at the geopolitical office in a meeting with the financiers.

Jon C. Ogg
June 6, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.