The great quote ‘what’s in a name?’ by William Shakespeare probably falls inappropriate in some cases. Let us say why?

Thanksgiving is today, and demand for turkey is high. While turkey is good only for a blessed dinner, investors can give special attention to a specific country named ‘Turkey’ on Thanksgiving – for any insightful investing opportunity – thanks to the similarity in name with the bird turkey, which is a must for most Americans on the special day.
 
For those investors we would like to dish out the economic and the stock market outlook of the equities and ETFs of Turkey. The timing is also apposite as the pure-play Turkey ETF iShares MSCI Turkey (TUR) has gained about 2% in the last month (as of November 23, 2015) though the product is down about 23.8%.
 
What’s Behind the Recent Bullishness? 
 
The Turkish market has been enjoying a bullish stretch recently thanks mainly to political hopes. Its ruling Justice and Development Party (AKP) won a surprising majority in this month’s election to rule till 2019.
 
The significant win put an end to the months-long political unrest and boosted the demand for risky assets in anticipation of a stable government. In fact, consumer confidence in Turkey also leaped post AKP’s win (read: Can Turkey ETF Survive Political Woes?).
 
Economy Edges Up
 
This once-woebegone economy is also sending positive vibes on the economic front. In October, its government doled out the Medium-term Economic Program and the Financial Plan for 2016–2018, wherein softer growth targets were mentioned but increased spending on social policies and defense areas was also hinted at, per Organization for Economic Cooperation and Development (OECD).
 
Investors should note that the Turkish economy, normally known for its wide current account deficit, recorded the ‘largest surplus in six years’ in September breezing past both year-ago number and analysts’ expectations. Persistently weak oil prices and a soft import demand led to this jump.
 
Notably, slumping oil prices is vital to the Turkish economy as the country imports more than 90% of oil for about 70% of its total energy needs. Imports fell 24.4% in the month – the steepest monthly plunge in five years – which in turn lowered trade deficit.

Sky-high inflation – the key botheration in the Turkish economy – eased in October after hitting a four-month high in September. Turkey’s central bank guides inflation at 7.9% at the end of 2015 and at 6.5% in 2016.

The economy stepped up in Q2 and grew 3.8% year over year beating market expectations. The growth rate was the best since the first quarter of 2014 thanks to strong domestic demand. In the first quarter of this year also, the growth rate came ahead of forecasts.
 
As per OECD, the economy’s GDP is likely to increase from 3% in 2015 to more than 4% in 2017 on abating political upheaval, improving job growth and a falling Turkish lira which in turn will boost exports in association with a global economic recovery. Lira has lost about 17.5% so far this year (as of November 23, 2015).
 
Deterrents 
 
Despite this optimism, the market is exposed to risks. A spike in geopolitical crisis at the southern region, terror attacks in the Middle East and the related entry of refugees are huge threats to the economy, per OECD. Moreover, the Fed is preparing for a lift-off, though gradual, in December. This will lead to a flight of capital from the Turkish economy and weaken the currency further (read:Can Emerging Market ETFs Defy U.S. Rates Hike?).
 
In any case, the Turkish lira is one of the worst-performing currencies this year. Further weakness in the currency will put pressure on the country’s huge oil imports, exaggerate foreign exchange outflows and lead inflation to jump. The lira’s decline has already lowered the average Turkish income from more than $10,000 to around $9,000. If this trend continues, it would be tough for Turkey to emerge out of this vicious cycle.
 
All in all, though tensions persist, things are slowly turning for the better. Considering both pros and cons, investors should take a closer look at the Turkey ETF before investing. Below we highlight the key details of the fund.
 
TUR in Focus

The ETF follows the MSCI Turkey Investable Market Index and provides a pure play exposure to 76 Turkish stocks. The fund is highly concentrated on its top 10 holdings which make up for nearly 60% of assets. Financials dominate the fund’s returns with less than half of the portfolio while industrials and consumer staples take double-digit exposure in the basket.

The fund has amassed around $359.6 million in its asset base and trades in solid volume of about 360,000 shares per day on average. The fund charges 62 bps in annual fees from investors and yields 2.59% annually (as of November 23, 2015). TUR has Zacks ETF Rank #3 with a ‘High’ risk outlook (see: all broad Emerging Market ETFs here).

Technical Look
If we take a closer look at TUR, hopes for a surge find some basis. From a technical perspective, TUR is poised for a surge in the coming weeks. It’s short-term moving average (9-Day SMA) is above the mid-term average (50-Day SMA), suggesting near-term bullishness.

Further, RSI is close to 50, meaning that the fund is about to slip in the oversold territory and might reverse the trend anytime. TUR trades at a P/E (ttm) of 10 times, lower than the broader emerging market fund (EEM - ETF report)’s P/E of 11.